The price of Solana, a cryptocurrency token that had been lauded by FTX founder Sam Bankman-Fried, fell 10.36% on Wednesday, and is down 94.2% so far in 2022.
The collapse of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world’s biggest crypto exchanges.
Solana , or SOL, is the token behind the upstart Solana blockchain, which supports smart contracts, including non-fungible tokens, and has emerged as a rival to the ethereum blockchain.
Bankman-Fried, who is expected to enter a plea next week to criminal charges he defrauded investors and looted billions of dollars in customer funds at FTX, frequently praised Solana. FTX and Alameda, Bankman-Fried’s trading firm, held Solana tokens on their balance sheets.
While Solana has no direct relation to FTX, and had limited exposure to the failed exchange, its association with Bankman-Fried has been a drag.
“The general problem with crypto is that its lack of intrinsic value means that values are based on confidence and perceived utility. If those suffer in relation to a specific token, then it suffers,” said Steve Sosnick, chief strategist at Interactive Brokers.
A representative for Solana was not immediately available for comment.
SOL has dropped 51.14% since the furor around FTX began unfolding on Nov. 2. In the same period, ether has fallen about 21.3% and bitcoin 17.6%.
The price of Serum, or SRM, the token for the decentralized exchange of the same name created by Bankman-Fried on the Solana blockchain, is down 80.5% since Nov. 2, trading at just over 14 cents, according to coinmarketcap.com.
The total market capitalization of the cryptocurrency market now stands at $798.4 billion, according to the website, down from a peak of over $3 trillion in Nov. 2021.
