FTX Unstakes $23M in SOL: Is a Major Selloff Coming?

A wallet linked to the now-defunct cryptocurrency exchange FTX and its sister firm Alameda Research has redeemed 177,693 Solana (SOL) tokens, worth approximately $23.75 million, from the Solana Proof-of-Stake (PoS) network.

This transaction, brought to light by PeckShield in a September 12 post on X, has sparked renewed speculation in the crypto community regarding a possible selloff of the tokens.

Speculation Grows Following FTX/Alameda Wallet Activity

Further data from Solscan indicates that the wallet in question, H4y…gFZ, still retains 7.057 million SOL, approximately valued at $954 million, currently staked.

This recent movement mirrors similar actions in November and December 2023, where the same wallet unstaked considerable amounts of SOL and transferred them to Coinbase.

This has fueled speculation concerning a potential selloff, as market participants usually shift tokens to centralized exchanges (CEXs) for liquidation after unstaking.

Nevertheless, some analysts contend that this may not significantly affect SOL’s price, as the amount unstaked is relatively small compared to the overall holdings of the wallet, which represents 1.5% of the asset’s circulating supply.

Moreover, it is anticipated that any future sales by the FTX estate may occur through over-the-counter (OTC) transactions, thereby diminishing the chances of a sharp market response.

Legal Challenges Persist for FTX Executives

The timing of the unstaking coincides with ongoing legal scrutiny faced by FTX and its executives. Former Alameda CEO Caroline Ellison is set for sentencing on September 24 after pleading guilty to all charges connected with the exchange’s downfall.

In spite of the legal issues and concerns regarding the unlocking, the SOL price has largely stabilized, even witnessing a 5% rise in the past 24 hours to $135. Additionally, the token’s price has increased by over 650% over the year.

Following a noteworthy performance in 2023, the fifth-ranked cryptocurrency has recorded more modest increases in 2024. After hitting a high of $209 in March, aligned with Bitcoin’s new all-time record, it has observed a downward trend. Currently, the price is stabilizing around $130, possibly paving the way for a future rebound.

For the token to achieve substantial price hikes, various factors must come into play, including advancements in network technology, a revival of meme coins, heightened institutional investments, and potential ETF launches.

The surge in meme coin enthusiasm played a crucial role in its rise to $200 in March. Should these catalysts emerge, market observers believe there is potential for its price to reach $1,000 by 2025.