During the 2021 bull market, Solana saw incredible price gains. Going from $2 to an all-time high of $260 made many investors wealthy. When looking back at this run and attempting to pinpoint some of the causes, Sam Bankman-Fried’s (SBF) name pops up.
SBF was an advocate for Solana, creating projects, investing in the token and speaking about it publicly. Many believe that SBF’s praise and use of Solana was a major contributor to its huge spike in 2021.
Specifically, SBF created a decentralized exchange (DEX) on the Solana blockchain called Serum. This project allowed users to trade and convert Solana and other tokens on a peer-to-peer exchange. SBF’s success with centralized exchange FTX also contributed to Serum’s success.
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However, SBF and FTX Trading Ltd. eventually came tumbling down. In early November 2022, FTX became insolvent. As the details became public, it was discovered that SBF was using customer funds for his proprietary trading firm Alameda Research.
This event was shattering for the crypto community, but Solana was hit particularly hard. Because SBF backed the project, many were hesitant to continue investing, and the price of SOL fell drastically. Within two months of FTX’s insolvency, SOL had depreciated by 50%. By the end of 2022, the token was worth less than $10. While other tokens also lost value during this time, SOL’s fall from grace was much larger than its peers.
Solana had a strong recovery in 2023. Despite beginning the year at a two-year low, the price reached a new 52-week high of over $125. This recovery was largely because of a handful of new projects and airdrops on the platform. Most notable are the memecoin Bonk (BONK) and the staking platform Jito (JITO). These projects attracted new investors and spurred new interest in SOL.
SOL’s recovery makes many wonder about SBF’s large position. At the peak, FTX and SBF held more than 60 million tokens, which was more than 10% of the total supply. While the amount of tokens has fallen slightly because of FTX’s selling to repay creditors, it still holds over 55 million…
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