{"id":1233,"date":"2022-11-12T08:14:32","date_gmt":"2022-11-12T08:14:32","guid":{"rendered":"https:\/\/solanacrypto.news\/2022\/11\/12\/solana-volatility-returns-after-ftx-bankruptcy-but-what-comes-next\/"},"modified":"2022-11-12T08:14:32","modified_gmt":"2022-11-12T08:14:32","slug":"solana-volatility-returns-after-ftx-bankruptcy-but-what-comes-next","status":"publish","type":"post","link":"https:\/\/solanacrypto.news\/2022\/11\/12\/solana-volatility-returns-after-ftx-bankruptcy-but-what-comes-next\/","title":{"rendered":"Solana Volatility Returns After FTX Bankruptcy, but What Comes Next?"},"content":{"rendered":"
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The Solana blockchain\u2019s SOL<\/a> token, one of the hardest-hit digital assets this week amid a steep sell-off across crypto markets triggered by the swift collapse of Sam Bankman-Fried\u2019s business empire, slid further on Friday after the one-time billionaire\u2019s main holding company filed for bankruptcy protection<\/a>.<\/p>\n

SOL’s price had tumbled to a record low earlier this week of around $12 and then surged 26% to as high as $19 on Thursday.<\/p>\n

But on Friday, after the FTX bankruptcy news, the price was back down to around $16, off 6.4% on the day. The SOL price is down 50% in the past seven days.<\/p>\n

The additional volatility has sparked a debate among crypto analysts and blockchain developers and executives over Solana\u2019s long-term future, with nagging questions about the prospects for the blockchain and how severely it might be affected by this week\u2019s fallout in the industry.<\/p>\n

The SOL token\u2019s recent price movements were tied to speculation about Solana\u2019s close connection with Alameda Research, a trading firm that was founded by Bankman-Fried. SOL was Alameda’s second-largest holding<\/a>, according to Riyad Carey, a research analyst at crypto data firm Kaiko.<\/p>\n

The theory was that Alameda might need to dump its SOL tokens to raise liquidity. SOL jumped Thursday after Solana Foundation postponed<\/a> a plan to “unstake” 28.5 million SOL tokens \u2013 implying an immediate relief from additional selling pressure.<\/p>\n

\u201cSolana is more centralized than, say, Ethereum, as they are clearly limiting the amount unstaked to protect SOL\u2019s price,\u201d Carey told CoinDesk.<\/p>\n

Crypto markets were also broadly down Friday; the CoinDesk Market Index<\/a> was down 3%.<\/p>\n

The swift decline in SOL doesn’t represent the \u201cdeath knell\u201d for Solana, according to Alex Tapscott, managing director of the digital asset group at Ninepoint Partners.<\/p>\n

He contrasted Solana with other blockchain projects where development is funded primarily by venture capitalists.<\/p>\n

“I think a lot of these protocols do benefit from astroturfing by VCs,\u201d he said, \u201clike an illusion of grassroots growth when in fact it’s all being underwritten by institutional money.”<\/p>\n