The guilty verdict for Sam Bankman-Fried last week could come as additional good news for holders of a token long associated with the former FTX CEO that has already surged more than 300% in 2023.
The Solana blockchain, and its native token SOL, was created in 2020 as a faster and cheaper alternative to Ethereum. Bankman-Fried was previously a major backer of Solana and described SOL as the “most underrated” token. At its peak in 2021, the cryptocurrency was worth as much as $260, but while SBF support was once a boon for the token, it later weighed on it.
In the days leading up to FTX’s bankruptcy, Solana’s price fell more than 60%. By the time Bankman-Fried was arrested and extradited to the US, the coin was trading at around $10, down 94% compared to its price at the beginning of 2022.
However, despite a short-term setback after the symbol was repeatedly mentioned during the Bankman-Fried trial in early October, Solana has been mostly trending higher. The coin is up 20% over the past seven days, and since January, its price has risen 340%, according to CoinGecko. As of Tuesday afternoon, the price was near $44.
This increase is a welcome reprieve for organizations that support the Solana network, including Solana Labs, which builds products and tools for the ecosystem. The company tried to distance itself from SBF after FTX’s collapse, co-founder Raj Gokal said luck In May, FTX’s collapse was “far, far away in the rearview mirror.”
Since then, several developments have helped increase investor optimism about the token and its underlying network. The latest of which is last week’s announcement Launch Firedancera validator client on the Solana testnet that aims to dramatically increase network throughput.
Solana’s planned improvements, along with far fewer downtime incidents than last year, have convinced some analysts of its increased potential.
Solana is undervalued and could be the first blockchain to host an app with 100 million users, said Matthew Siegel, head of digital assets research at ETF and mutual fund manager VanEck.
“It’s fair to say they’ve outgrown FTX,” Siegel said.
Solana has also seen positive signs from investors in digital assets, who have pumped in about $35 million over the past two weeks, according to CoinShares. In an October CoinShares survey of 58 investors covering more than $500 billion in assets under management, Solana ranked third behind Bitcoin and Ether among digital assets with the most compelling growth prospects.
However, other analysts such as Mark Connors, head of research at 3iQ, are skeptical that the planned upgrades are the main reason behind Solana’s recent comeback. Connors noted that the expected large sell-off of SOL from the FTX wallet never materialized, which may have been responsible for the large inflows of the token in October. Some of the credit may also be due to Solana’s fanbase.
“The ‘Ethereum Killer’ has a large and loyal constituency,” Connors said in an email. “So, there is no bad news associated with SOL being largely oversold in 2022 making it reasonable to expect some overshoots versus others.” [altcoins] In 2023.”