In the upcoming months of March and April, 12 million SOL will be unlocked, raising concerns about selling pressure in the market. Notably, this large amount of SOL is related to FTX, the exchange that has gone bankrupt and is in the process of repaying users.
Origin of 12 Million SOL from FTX
Back in 2020, when FTX was one of the leading exchanges, they purchased 58 million SOL from Solana Labs and the Solana Foundation with various unlock schedules. After declaring bankruptcy, FTX had to liquidate assets to pay off debts, leading to a large auction of $SOL to various institutions:
#GALAXY bought 25.5 million SOL at a price of 64 USD/SOL.
#PANTERA and some other companies bought 13.7 million SOL at a price of 95 USD/SOL.
#Figure along with some other units bought 1.8 million SOL at a price of 102 USD/SOL.
With the current SOL price trading around 195 USD, these institutions are making a huge profit:
Galaxy has made a profit of 205%, equivalent to 3.3 billion USD.
Pantera and Figure have also achieved profits of 1.5 billion USD.
Selling Pressure and Market Reaction
The unlocking period will begin on March 1st with 7.5 million SOL (equivalent to 1.46 billion USD). The total unlocking amount in March and April will reach 12 million SOL, and the remaining amount will be gradually allocated monthly until December 2026.
Due to the large profits, it is likely that these institutions will sell to realize gains. This has caused the price of SOL to drop 10% in the past 7 days and over 22% in the past 30 days.
Trading Volume Soars
Along with the unlocking event, the trading volume of SOL has surged, exceeding 7 billion USD in the last 24 hours - the highest level since January 1st. This indicates that investors are responding strongly to the upcoming selling pressure.
Risk Warning
The unlocking and large-scale selling of SOL could cause significant volatility in the market. Investors need to be cautious, closely monitor the situation, and only invest amounts they can afford to lose to avoid unwanted risks.