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- SOL🔻50%, its FTX ties explain why!
Good Morning Switchers 🤗
👋Welcome to Switch Daily.
Whatsup? Well, the markets are green for the second day in a row, not to jinx it, but yayy!
Also, despite all that’s going on in the cryptoverse, a report by market research firm Spherical Insights & Consulting says that the global market for fintech blockchain is estimated to grow at a CAGR of 43.8% to touch US$8.7 billion by 2030. That's great news people!
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Here’s what we’ve got for you:
Market pulse
The Solana, FTX affair
Piping hot news
Meme of the day
Market pulse 📈
The market is recovering 🙂
The crypto market witnessed a mixed session on Tuesday as it tried to recover from last week’s FTX fiasco. The total crypto market cap rose by $50 bn from Monday’s low point of $800 bn. Support came from US wholesale inflation numbers, which recorded 4th straight decline in October, and Nasdaq 100 closing the day with a modest gain.
Coin of the day: Ripple
XRP was the top gainer in the top 10 cryptos list. Hopes of a favorable outcome for Ripple in its ongoing legal battle with the SEC created significant support for XRP. It has gained 3.33% since yesterday.
Can SOL find some solace?
It’s been a wild ride in the crypto market this week. Almost all crypto assets, including Bitcoin and Ethereum, have turned deep red. All of them shed an average of ~15% of their value since the FTX drama was unveiled.
But this one top-rated coin lost over half of its value over the FTX news. Of course, we’re talking about Solana. It has lost over 50% of its value since 08 Nov 2022—the day FTX’s shenanigans started seeing daylight.
CoinMarketCap
You gotta have been asking yourself, WHY SOLANA?
Well, the Solana Foundation has an answer for us. Recently, they published a blog post on ‘Solana Ecosystem Facts Related To FTX Bankruptcy’ with deets of all the ways they are exposed to FTX.
Here’s a quick rundown:
Solana Foundation has ~$1 million cash or cash equivalents on FTX.com. The value is less than 1% of Solana’s cash reserves, so the exposure is negligible.
It owns ~3.24m FTX stocks and ~3.43m FTT tokens.
Holds ~134.54m SRM tokens (Serum is a Solana based DEX which was closely associated with SBF).
The FTT and SRM assets are worth $29.3 million and $4.4 million, respectively, at current market prices, but they were worth around $107 million and $83 million one day before the freeze.
How much SOL does FTX/Alameda Research own?
Solana Foundation sold over 50.5 million SOL to FTX and Alameda Research, and the current value of these tokens is ~$708 million.
Solana Labs (a sister company representing Solana’s founders and core contributors) sold 7.56 million SOL worth ~$106 million to Alameda research.
Most of the SOL tokens owned by FTX are locked and will unlock in monthly schedules until 2028.
To water it all down:
The FTX balances are negligible, but Alameda's investments in the Solana ecosystem are huge.
It owns large amounts of unvested SOL in its Balance Sheet. Alameda can sell these tokens and cover their losses as they vest. And selling large amounts of tokens can lead to high selling pressure, in turn bringing Solana’s value down, just like it did the past week.
What do we always say? DYOR and stay SAFU!
What else is trending 🤔
Crypto exchange Binance is creating a fund to help potentially strong projects with liquidity issues amid the current crypto market meltdown fueled by FTX’s bankruptcy filing.
Vitalik Buterin, the co-founder of Ethereum, donated 20 million Dogecoin (DOGE), worth about $2.9 million, to the Dogecoin Community on 2 November. DOGE was up by 6.1% since the news.
The NFT market might have nosedived big time in 2022, but that's not stopped Yuga Labs from expanding. Yuga Labs, the parent company behind Bored Ape Yacht Club (BAYC), has acquired Web3 ecosystem WENEW and its flagship NFT collection 10KTF.
Meme of the day!
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See you tomorrow, folks. 👋
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