Collateral Damage
Solana fans must be extremely disappointed as the FTX debacle continues to haunt and decay a once flourishing ecosystem. Next to ETH, Solana was primed for greatness and mass adoption. It’s no secret that Sam Bankman-Fried’s endorsement and investment in Solana helped propel the blockchain into the Top 10.
However, that is no longer the reality. SOL has been on a steady collapse and is about to fall out of the Top 20. Solana is a classic case of collateral damage and reveals exactly how destructive centralization can be. It is important to note that this is all unfolding due to “association” and a lack of decentralization. There are pros and cons to everything.
Relying on strong backing via VCs and other heavy hitters is great until something goes wrong. A more decentralized distribution of SOL would have rendered FTX’s collapse a lot less catastrophic. Sadly, this is not the case. FTX acquired a large portion of Solana’s circulating supply, ultimately, holding the chain captive.
How far Solana continues to fall is anyone’s guess. My first expectation is between $5 and $7. However, depending on how badly the development on the chain continues to deteriorate, a dollar is also realistic. Fortunately, this collapse hasn’t affected me. I picked up my first SOL under a dollar and have been short for much of this collapse.
I am still short. The past 24 hours have really put some amazing distance between my entry and the current price. I usually adjust stop losses once a position is in profit. This ensures that an unexpected move contrary to my position cannot steal my gains or plunge me into a loss. Trading 10X can do that very quickly, especially in Crypto.
Ethereum Is Worse
The centralization of Solana has been its downfall, where once it was actually its glory. However, Ethereum is now a lot more centralized than Solana. As I have mentioned, my exposure to ETH from here on will be minimal. I managed a decent buy during the covid crash at approximately $100, so I am pleased with my time in Ethereum.
As I have also mentioned, I exited the majority of my ETH between $4500 and $3500. I am not that concerned about the current layer 1 blockchains. I am choosing to watch from the sidelines. Very modest accumulation however continues for Cardano and a few others. Blockchains like Hive, Ravencoin, and other under-the-radar projects are gaining my attention.
Ethereum is much like Bitcoin now, the real gains have been realized. A lot of investors talk about when Ethereum will hit $10K. That’s not even a 10X. I enjoyed 35X to 45X on ETH during the last bull market. I am not going to get that again. So, I am looking elsewhere.
Final Thoughts
There is a lot to take away from the Solana collapse. It is equally important to meditate and consider scenarios and situations. There are too many hot-headed investors in this space. Take a step back, relax, and consider your next steps from here.
This also applies to trading. Overtrading is a very real problem for many traders. A calm and thoughtful approach gives you an unparalleled advantage. Until the next one, stay the course!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
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Solana was really a promising blockchain especially in terms of development, they were about to launch a smartphone too. But all of it was built on a non robust foundation because they were too centralized and they're now paying the price for it. I hope the developers (and investors alike) learn the lesson and migrate to a more robust or decentralized blockchain.
A blockchain phone really sounds like an amazing idea
Indeed. I don't think it has been done before.
Yeah
Solana: I think it's an example of how much value decentralization can bring to a blockchain. The decline this network had is truly impressive, after many understood the relationship between this network and the FTX exchange they divested money. I also believe that the decline of this network is not over yet
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The market is still correcting itself and getting rid of fake "investors" you know, the types who still see crypto purely as a ponzi