The $2 billion SOL is about to be unlocked. Is the market pressure high?

Author: 1912212.eth, Foresight News

On March 1, FTX's bankruptcy auction of 11.2 million SOLs will be unlocked, worth $2.06 billion, and the number of unlocked tokens accounts for about 2.29% of the current SOL circulation supply.

With such a huge selling pressure and the sluggish market, the SOL currency price performance is quite sluggish. Since the Trump TRUMP concept coin triggered a market craze in January this year, SOL once hit its all-time high of $295, and then fell all the way. The weekly line has fallen for four years and has fallen to a low of around $160. Is it Solana's turn to be FUD?

This article will discuss the impact of this event from multiple perspectives such as unlocking background and potential market impact.

FTX bankruptcy and SOL unlock background

FTX bankruptcy is one of the most iconic events in cryptocurrency history. In 2022, this former industry giant collapsed due to a broken capital chain and poor management, and then entered the bankruptcy liquidation process. As an early investor in the Solana ecosystem, FTX and its affiliate Alameda Research hold a large number of SOL tokens. FTX holds a total of approximately 41 million SOLs, most of which are locked, and the unlocking time is distributed between 2025 and 2028. To repay creditors, the FTX bankruptcy management team sold these locked tokens in advance through auctions and attracted the participation of institutional investors at a large discount.

The 11.2 million SOLs unlocked this time are part of the previous auction. The main institutions participating in the purchase include Galaxy Digital, Pantera Capital and Figure. Among them, in 2024, Galaxy purchased 25.52 million SOLs for US$64 each, Pantera and others purchased 13.67 million for US$95, and Figure and others purchased 1.8 million for US$102. These institutions bought at prices far lower than the market price at that time, and even if the SOL price fell to around $170, the book profit was still considerable.

Potential impact of selling pressure plate

11.2 million SOLs are equivalent to 2.29% of Solana's current circulating supply (about 488 million), and are worth more than US$2 billion. For an asset whose daily trading volume is usually between 1 billion and 2 billion US dollars, this part of the unlocked token inflow may undoubtedly cause market turmoil. If these tokens are sold quickly, the oversupply situation in the short term may lower the price of SOL, triggering panic selling by investors, thereby aggravating the downward trend.

The extent of market impact depends on the behavior of the holder after unlocking. Most of the buyers of these tokens are experienced institutional investors who bought them at low prices during auctions, and the current book profits are already quite substantial. If they choose to cash out immediately after unlocking, the selling pressure will increase significantly. But from another perspective, these institutions have been holding for months or even years during the lock-up period, showing a certain long-term investment intention. VanEck investor Matt Maximo has revealed that some buyers he knows have made it clear that the goal is to pursue higher returns rather than short-term arbitrage.

In addition, SOL's recent price performance also provides some clues to market sentiment. Since FTX went bankrupt, SOL prices have surged from a low of $22 to the current $170, up more than 700%. Despite the recent pullback in the market, the overall trend still shows strong support.

How likely is the market panic?

Whether the selling pressure will trigger market panic depends largely on investors' psychological expectations and market environment. Some users expressed concerns about the unlocking, believing that the $2 billion selling pressure may smash the trend line, causing further price declines. However, there are also opinions that the 2.2% circulation growth rate is relatively limited, and most SOLs have already changed hands many times in the market, so the actual impact may be exaggerated.

The encrypted KOL SOLBigBrain, which once got on the bus around $20, said that some of it has begun to be included in the price. Although some people will choose to sell it after unlocking, the narrative and momentum of SOL are still quite strong.

At present, some funds on social platforms and KOLs are generally optimistic about SOL's currency price this year, and a considerable number of views even believe that SOL will exceed US$700 this year.

From historical experience, large-scale unlocking events do not always lead to market crashes. For example, when FTX was approved to sell crypto assets of US$100 million a week in 2023, the market did not experience a significant decline, but instead gradually absorbed the selling pressure. On January 7, 2021, SOL unlocked 362 million tokens, accounting for 55.7% of the maximum supply, when the currency price was around USD 3, hitting an all-time high of USD 259 in November 2021.

Generally speaking, the negative effects of unlocking will ferment one month before the official unlocking, and the negative news will be exhausted after the unlocking is completed, and it may even rebound at some point. Taking ONDO as an example, it ushered in huge unlocking in mid-January this year. It has fallen all the way since it hit the top in December 2024. However, after the official unlocking, there was no so-called panic selling and other market behaviors. Instead, the currency price continued to fluctuate within a certain range. . This time, despite the larger scale of SOL unlocking, the institutional attributes and high profit buffers of participants may weaken the selling motivation.

Solana's fundamentals are still strong

The fundamentals of the Solana ecosystem itself also resist potential risks to a certain extent. As a high-performance public chain, Solana has attracted a large number of developers and users in its low transaction costs and high throughput in recent years. In the past year, Solana has been highly sought after and cheered by the market for its meme wave and AI concept coins, and the wealth effect on its chain has also attracted many users to rush forward.

According to solscan data, the total supply of USDCs on-chain has reached 9.6 billion USDCs and 2 billion USDT, and the number of PYUSDs has also risen to around 150 million. The number of independent address Holders also reached 3288,566, and the total number of active pledged SOLs reached 390.2 million. Although the number of active wallets has declined, it remains at a high level.

The number of new accounts also remained at a high level.

in conclusion

Overall, the unlocking of SOL worth over $2 billion on March 1 will undoubtedly put some selling pressure on the market to a certain extent, but the possibility of triggering a full-scale panic is relatively low. The rational decision-making of institutional investors, the market's digestibility and the resilience of the Solana ecosystem will all become key factors to buffer this impact. For investors, paying attention to the unlocked price trend and trading volume changes, while developing strategies based on their own risk tolerance will be the best way to deal with this event. On the stage of cryptocurrency full of variables, opportunities and challenges coexist, and SOL's story is obviously not yet over.