Solana (SOL) Price Correction Spirals, Will the Ethereum-Killer Survive in 2023?

With the fall of crypto exchange FTX, Solana remains one of the most-impacted digital assets as of date. It seems there’s no bottom in sight for the SOL price which tanked by another 8% on Wednesday, December 28.

Amid the recent price correction, the SOL price has dropped under $10. Called once the Ethereum-killer, Solana has faced a staggering 75% price correction over the last eight weeks.

Solana’s close association with FTX’s disgraced founder Sam Bankman-Fried has put the cryptocurrency under major skepticism. The continuous drop in SOL price shows the rapidly waning investor confidence in the Etheruem-killer.

In an interview earlier this month, Anatoly Yakovenko, co-founder of Solana Labs Inc. said that he won’t comment on the SOL price movements. He added that his focus instead should be on “the technology and having people build something awesome that’s decentralized.”

FTX was holding a large quantity of SOL as reserves. However, as its native token FTX plummeted, the crypto exchange started selling its SOL holdings in heavy quantity putting pressure on its price. SBF was one of the close aids of Yakovenko and appeared alongside him at conferences and fire chats. Commenting on this Yakovenko said:

“I’m still trying to square what I perceive him to be and like what actually happened. It just feels really, really jarring.”

Will Solana Survive In 2023?

Amid the dramatic collapse in the price of Solana (SOL) over the last two months, many market experts have started questioning whether Solana will survive going into 2023. Yokavenko explained that only 4% of the projects built on Solana have been impacted by the FTX collapse.

He added that nearly 80% of the teams building projects on the Solana blockchain have no exposure to FTX at all. “There’s definitely more to Solana than FTX,” Yakovenko said. He also added that they are in touch with those impacted projects to help them with additional emergency capital.

FTX and Alameda’s venture arms had invested massively in Solana-based projects last year. Furthermore, FTX US also launched its first NFT marketplace on Solana last year. Alameda Research still has huge exposure to SOL. as the bankruptcy proceedings move ahead, Yokanvenko said that they still don’t have any clarity on what shall happen to these holdings.

But another co-founder Raj Gokal assured that “there’s no impact on the security of the network from things like the concentration of SOL tokens on Alameda’s balance sheet.”

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.