It’s a real comeback. The spectacular comeback of cryptocurrency, which many pundits and industry sources considered almost dead after the bankruptcy of Sam Bankman-Fried’s empire on November 11th.
They said Solana ( SOL ) would not be able to survive the earthquake represented by the fall of cryptocurrency exchange FTX and its sister company Alameda Research, a hedge fund that also acts as a trading platform for institutional investors.
FTX and Alameda were the main companies representing the Bankman-Fried crypto empire, known by the initials SBF, in the crypto space.
Solana did have close ties to Bankman-Fried. Nicknamed “Sam coin”, Sol is a token issued by Solana Blockchain that enables the development of decentralized finance or DeFi projects that offer financial services such as loans, mortgages, financial products, etc.
The token is linked to an on-chain crypto exchange called project Serum, which was created by Bankman-Fried, who resigned on November 11 following the bankruptcy of his empire. Serum is a node of liquidity.
Serum is one of the foundations of the Solana DeFi infrastructure, as it is the protocol and ecosystem that brings Solana DeFi high speed and low transaction costs. It implements an on-chain central limit order book and matching engine that allows for liquidity sharing and offers powerful trading features to institutional and retail investors.
The serum is asset agnostic. it provides developers with full control and flexibility to create trading applications that leverage Serum’s liquidity and ecosystem benefits.
To prove Cassandra right, Sol prices thus fell by 73% between the start of FTX’s troubles on November 6th and December 31st. They ended the year at $9.96, up from $32.72 on Nov. 5.
SOL is up 79%
But as quickly as they crashed, Sol prices are also recovering very strongly. In the past seven days, they have increased by 79%, according to data from CoinGecko. Sol knocks on the doors of the top 10 cryptocurrencies in terms of market capitalization in a recent check. The sign belonged to this club before its collapse.
Prices are currently trading at $23.39, up 134% year-to-date.
The mood around Solana changed after Vitalik Buterin, one of the most influential voices in the crypto space, announced his support.
“Some smart people tell me that there is a serious community of smart developers in Solana, and now that people are out of the horrible opportunistic money, the chain has a bright future,” said Buterin, one of Ethereum’s co-founders. a powerful platform in the crypto sphere, he wrote on Twitter on December 29.
He added, “It’s hard for me to say from the outside, but I hope the community gets its fair chance to thrive.”
For many industry sources, the resurgence of SOL is also driven by growing demand for decentralized finance projects. The Solana blockchain allows developers to create decentralized applications or dApps at low cost and offers transaction processing speed.
Its scalability, speed, and affordability make it an attractive option for DeFi projects that need to process large amounts of transactions quickly and at low cost.
“While traders celebrate the resurgence of #Bitcoin (over $21k) and #Ethereum (over $1,550), #Solana is the real star as the weekend kicks off,” commented chain Santiment analytics company. “$SOL is up +22% in the past 2 hours alone, with shorts liquidated.
Santiment speculates that the strong recovery in Sol prices is due to a “short squeeze,” which is a sudden increase in an asset’s price due to the fact that investors who bet against the asset are forced to buy it to limit their losses;