Ethereum killer Solana lost 96% of its value in 2022 and is no longer a top 20 crypto-currency

The year 2022 has been one of the most terrible years for investors in the crypto-currency market and Solana, the Ethereum killer, is particularly going through a very difficult phase. On Thursday, December 29, the price of Solana (SOL) dropped another 17%, reaching the $8.5 level.

The SOL crypto-currency also fell out of the top 20 crypto-currency list, but has partially recovered. At press time, SOL is trading at $9.38 with a market cap of $3.4 billion. Since the beginning of 2022, SOL’s price has fallen by more than 96% so far.

The major correction in Solana’s (SOL) price was triggered after the implosion of the FTX crypto-currency exchange last month. The now defunct FTX exchange and its sister company Alameda Research had invested in a number of Solana-based projects. In addition, FTX was also building its own projects, such as the decentralized finance (DeFi) platform Serum. Finally, FTX US was planning to launch its NFT marketplace on Solana. But all these projects are no longer operational.

One of the main reasons is that Alameda Research held SOL in large quantities and as a reserve currency. However, it began selling SOL off in droves to protect FTX’s native crypto-currency, the FTT token. This led to a downward spiral for SOL, which still hasn’t recovered from FTX’s collapse.

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In the eight weeks since FTX imploded, SOL’s price has fallen another 75%. As a result, many market analysts doubt that Solana can survive until 2023.

Will Solana survive into 2023 and rise in the crypto-currency rankings?

In an interview earlier this month, Solana Labs co-founder Anatoly Yakovenko shared his views on the current development. He said that instead of focusing on the price of SOL, they would rather focus on building the technology and making it more robust.

Yakovenko was on good terms with FTX’s disgraced founder, Sam Bankman-Fried, and participated with him in several conferences and discussions about fire. “I’m still trying to reconcile what I perceive of him and what actually happened. It’s just really, really a shock” he added.

But Yakovenko added that about 4% of Solana’s team was actually affected by the FTX collapse. The Solana co-founder said that about 80% of the teams on Solana’s blockchain have no exposure to FTX of any kind. Yakovenko said they are in contact with all impacted founders and are considering offering them emergency capital. “Solana is not just about FTX“, said Mr. Yakovenko.

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The Solana Foundation currently has $1 million in cash equivalents on the exchange. As part of the bankruptcy proceedings, they do not know what will happen to those funds.

Interestingly, Ethereum co-founder Vitalik Buterin has lent his support to Solana. He wrote :

“Some smart people tell me that there is a community of serious smart developers in Solana, and now that the ugly money opportunists have been washed away, the channel has a bright future. It’s hard for me to tell from the outside, but I hope the community gets its chance to thrive.”

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