Solana’s price continues to fall, with the token now down 96% from all-time highs.
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As a crypto exchange platform announces it would delist them, the smart contract platform Solana (SOL) and other related digital assets continue to plunge.
According to cryptocurrency reporter Colin Wu, the decision by crypto exchange Matrixport to delist SOL and its associated digital assets will take effect on December 30. This move has further weakened the already-fragile cryptocurrency market and major reason of solana’s decline.
Matrixport, the asset management platform founded by Jihan Wu, announced that it will delist SOL and SOL-U dual-currency investment products on December 30, and will not launch new Solana products in the future.
— Wu Blockchain (@WuBlockchain) December 29, 2022
Wu claims that Matrixport won’t ever contemplate releasing SOL products.
Jihan Wu’s asset management company, Matrixport, has announced that it will delist the dual-currency investment products SOL and SOL-U on December 30 and won’t introduce any new Solana products going forward.
At the time of writing, Solana is trading for $8.27, down 13% from the previous day and a startling 96% from its all-time high of $259.24 reached in November 2021.
Other SOL-based crypto assets impacted include Serum (SRM), a decentralized exchange (DEX) platform, and Raydium (RAY), an automated market maker that offers liquidity services for Serum.
SRM is currently trading for $0.121, down 6.7% from the previous day, while RAY is trading for $0.135, down 5% from the previous day. Both have fallen by 99% from their peak prices.
Hardcore believers, however, maintain their optimism in the face of difficulty.
Solana will have the greatest comeback story in crypto history.
— Lite. (@LitecoinYagami) December 26, 2022
I can see it already. Stay strong.
Solana and Crypto Community
The cryptocurrency community has been debating the potential of Layer-1 smart contract technology Solana and how it might compete with Ethereum over the past several days. During the bull market of 2020–2021, Solana saw fast expansion, with venture investors at the forefront of SOL’s price increase. Concerns have been raised concerning the chain’s long-term prospects due to the recent exit of large projects from the Solana ecosystem.
Over the past several days, Solana has experienced a sharp decline in on-chain activity, which is unusual for the network. Furthermore, detractors claim that technological obstacles would prevent Solana from competing with Ethereum. Additionally, the Layer-2 protocol of Ethereum puts Solana’s main focus on tested quick and inexpensive transactions in danger.
What is the primary cause of Solana’s decline?
The impact of FTX’s demise and that of its disgraced former CEO, Sam Bankman-Fried, has been the main cause of Solana’s decline. The then-billionaire was Solana’s strongest supporter, despite allegations from skeptics that the owner of FTX hurt SOL’s price growth during the previous two bull market trends.
Based on subsequent developments in the Solana ecosystem, the doubters about Solana were, however, only partially correct. SOL reached an all-time high price of $258.76 in November 2021, but its current worth is just under $10. This indicates that the asset’s value has decreased by 96%, which is more than the decline in BTC and ETH prices.
Sharp Solana’s Decline
The collapse of FTX in November, which was brought on by accusations of fraud and money laundering against its creator, coincided with the biggest price solana’s decline. It’s interesting to note that there is rumor circulating within the digital asset ecosystem that Bankman-influence Fried’s allowed monies from FTX’s poor management to significantly boost Solana’s prior victories.
In recent testimony to the US Securities and Exchange Commission (SEC), former Alameda Research executives—including the company’s former CEO, Caroline Ellison—also revealed that Bankman-Fried was in charge of manipulating the price of FTT, the native token of the FTX.
This suggests that the disgraced FTX CEO not only manipulated the price of projects based in Solana, which he helped create but also held significant control over the accounting and loan scheme that formed the basis of the FTX fraud. Bankman-Fried could exchange his clients’ monies in other assets, like BTC or ETH, for SOL or FTT tokens by using Alameda Research to influence the pricing of the cryptocurrency market.
Ongoing Challenges
It is important to remember that Solana had problems even before the public learned about its FTX relationship. Since the network’s launch, spam attacks have occasionally overrun it, stopping Solana’s operations frequently. Industry professionals connect its enduring problems to its value proposition as a quick and inexpensive L1 substitute for Ethereum’s L2.
In this scenario, Solana is a victim of its fundamental vision, a problem that its creators are still working to address. Solana is now in the spotlight after the most recent performances as it starts another arduous ascent to the top.
Final thoughts:
Despite being a “shitcoin,” Solana might still be a good investment in the future, according to BitMEX founder and Bitcoin (BTC) maximalist Arthur Hayes, because major financial media sources are speaking out against it.
Even if SOL is a total shitcoin, if the mainstream financial press starts dunking on it at some point, it will be a buy. As in the headline news section. No movement is ever upward or downward in a straight line.
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Disclaimer: This blog is for educational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
