FTT - Solana Might Be Tanking Right Now But Here's Why It's Still a Long-Term Buy
In the span of just 48 hours, the fortunes of Solana (CRYPTO: SOL) have seemingly turned upside down. Just two days ago, analysts were lauding Solana for its major new Alphabet (NASDAQ: GOOGL) partnership involving Google Cloud, and some thought the price of Solana might be ready to take off again. But then came the crypto crash of Nov. 8 and the spectacular collapse of cryptocurrency exchange FTX (CRYPTO: FTT) . The price of Solana tanked, falling more than 30% in the span of just 24 hours.
While all cryptos were pulled down by the drama surrounding FTX, Solana seems to have suffered far worse than any of its peers. Cardano (CRYPTO: ADA) , for example, fell 7.3%, and Ethereum (CRYPTO: ETH) declined about 16%. That has led many crypto analysts to explore the relationship between Solana and FTX, with some hypothesizing that Solana may have been collateral damage in FTX's frenzied efforts to remain solvent. If that's the case, then there are three key questions investors need to ask before they invest in Solana.
The short answer, quite simply, is that Sam Bankman-Fried, who resigned Friday as chief executive officer of FTX, has a close relationship with Solana that many in the crypto world have known about for some time. In fact, Bankman-Fried is known as one of the most prominent supporters of Solana, and his investment firm helped to lead a $314 million funding round for Solana in 2021. Speculation has persisted for some time that a significant portion of Bankman-Fried's wealth is tied up in Solana.
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Solana Might Be Tanking Right Now, But Here's Why It's Still a Long-Term Buy