Solana (Sol) has plummeted 50% in the almost straight line over the past five weeks. This is a decline coinciding with rising market volatility, a speculative frenzy of Memocoin and looming sales pressure from the upcoming unlock of FTX Estates. Travis Kling, Crypto Asset Manager, founder of Ikigai Asset Management, warns that the former investment paper “owning a casino” could be unraveled in real time, bringing attention to the broader implications of divestiture.
“Solana is like a casino covered in fentanyl.”
The key catalyst behind Solana's decline is set to unlock March 1st of SOL 11.2 million held by FTX Estate. The event is expected to introduce substantial sales pressure, and market participants speculate that a significant portion of these tokens will be sold via in-store (OTC) transactions at discounted prices at average prices (TWAP) of the era.
“If many of these 11.2 million sols were sold in large quantities via OTC, that wouldn't be a surprise at all,” Kling said in a recent X post. Therefore, buyers are incentivized to lower prices. ”
The sales pressure from these unlocks is exacerbated by the fact that FTX locked SOL buyers are sitting in unrealized profits despite recent fixes. Many of these holders may be considering hedging their position or making profits in anticipation of increased liquidity.
Beyond the FTX overhang, Kling highlighted Memecoin's speculation as an unstable force within the Solana ecosystem. The timing of the price peak for Sol coincided with “precisely with the launch and collapse of Trump and Melania,” referring to the explosive rise and the collapse of Memocoin, the theme of the politics that followed.
Kling further pointed out a series of famous memo coin launches, including the Central African Republic, Changpeng Zhao's dog, Dave Portnoy's token, and Javier Milei-inspired coins.
“Well, over the past five weeks we've got Trump/Melania. Then the Central African Republic. Then the Changpeng dog. Then Dave Portnoy. And Javier Miley Crescendo. Obviously, it's ridiculously extracted. No pointless. Nihilistic. Embarrassing. Everything is bad. Not good.”
This strengthened speculation has led Kling to question whether the long-standing paper on “casino ownership” (a phrase often used to describe institutional demand for Solana as high-throughput blockchain catering for speculative transactions) is valid.
For almost two years, institutional investors and Takanet individuals pitched the idea that Solana represents a crypto “casino.” But Kling now believes the story is undergoing a fundamental change.
“So what you might be seeing in real time is to dismantle and unleash this investment paper to “own a casino.” Casinos are causing too much damage to their customers. The casino empowered games are literally killing customers very much. ”
He strengthened his analogy with Stark's comparisons. In the short term, this seems like a great strategy. Customers cannot leave! But soon you start losing customers. Soon it's just a dealer and some zombies left. Do you want to own that casino? ”
Despite current market turbulence, Kling has focused on the approval of a potential bullish catalyst on the horizon: Spot Solana ETF. The timeline remains uncertain, but he suggested that demand for spotsol ETFs could exceed Ethereum (ETH) demand, at least two months ago, based on investor sentiment.
“Spotsol ETFs should come soon. Maybe in the next 1-3 months. Maybe 6. Maybe the end of the year on the long side. idk. But soon,” he wrote. However, institutional sentiment can now change in real time. To what extent the “casino” paper has been eroded, combined with ongoing regulatory uncertainty over Solana-based financial products, could affect the actual demand for launched spot ETFs.
At the time of pressing, Sol was traded for $140.
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