Published: November 1st, 2023
Bitcoin’s October run has lost some steam this week, but as the surge subsides, a number of altcoins have seen their prices spike.
Looking at the top 20 coins by market cap, Solana has seen the biggest gains. Data from CoinGecko shows that SOL jumped by over seven per cent from Monday 30th October to Tuesday 31st, trading at USD 34.77.
Over the past seven days, Solana, which had been tarnished this year by its association with the FTX scandal and saw price dips each time it was mentioned at FTX founder Sam Bankman-Fried's trial, has shot back up by 20 per cent.
XRP has also seen impressive gains. Its price was up nearly five per cent from Monday to Tuesday and was trading at USD 0.55 at time of writing.
Avalanche, sitting at 20th on the top digital asset by market cap list, was up over three per cent from Monday to Tuesday. Like Solana it has posted steady gains over the past seven days, up by 17 per cent.
Meme coin Pepe is also on the rise. The newest addition to the top altcoin performers list is now fetching USD 0.00000120, representing a nearly five per cent rise from Monday to Tuesday. For the past seven days, however, it tops the list with a price jump exceeding 60 per cent.
Most cryptocurrencies have seen price gains over the past week as traders and investors open new positions on optimism that SEC approval for a Bitcoin spot exchange-traded fund (ETF) is imminent.
Some of the biggest names on Wall Street have submitted applications to the financial watchdog for a BTC ETF product. After dragging its feet and losing a series of legal challenges, analysts now believe it's a foregone conclusion that SEC regulators will green light the first ETF.
Last November, Solana was on the defensive when figures from Alameda Research showed plunging prices for SOL, which lost more than half of its value in the aftermath of the FTX liquidity debacle.
Most major coins saw their value drop significantly in the week following the closure of popular exchange FTX. Its sudden collapse cratered confidence in the wider crypto market. Solana was hit particularly hard due to its close ties to FTX and embattled founder Sam Bankman-Fried.
On Tuesday 15th November 2022, the Solana Foundation revealed the extent of its financial links to both, saying that it had roughly USD one million in cash or other assets on the exchange before FTX stopped processing customer withdrawals on 6th November 2022. Pending the results of FTX’s bankruptcy proceedings those assets were held in legal limbo for an extended period. The Foundation noted, however, that the sum amounted to less than one per cent of its funds.
More worrying was the revelation that the Solana Foundation held more than 3.2 million shares of FTX, next to more than 3.4 million FTT tokens and 133 million SRM tokens from the Project Serum decentralized exchange (DEX), another one of Bankman-Fried's businesses.
At time, the FTT tokens were valued at about USD 4.34 million, while the SRM tokens were valued at around USD 29.2 million. Both tokens saw their prices plunge in the initial FTX furore. On Monday, November 7, Solana’s hoard of FTT tokens were worth about USD 75.4 million, while SRM tokens were worth over USD 100 million.
A blog on the Solana website explained that FTX and its affiliated crypto trading firm Alameda Research, owned more than 50 million SOL, which were valued at roughly USD 707 million at time of writing. A sizeable proportion of that SOL is held in a monthly unlock schedule that extends to the year 2028.
Many analysts believed Solana could be permanently tarnished by its FTX and Bankman-Fried associations. The high-flying coin has already seen its value impacted by controversy related to crypto personalities.
In March 2022, SOL was caught up in a rout of Layer 1 network coins that took down market leaders like Terra and Cosmos, which all suffered drops of five per cent or more.
The sudden drop was triggered by an announcement by Fantom Network that key developer Andre Cronje would be leaving the DeFi leader. Fantom saw its value sink by 12 per cent on news of his departure.
Cronje played a central role in expanding the Fantom ecosystem with the launch of Solidly, a new decentralized exchange. Solidly lifted the total value of all Fantom network projects. On news of his departure however, the network has experienced a crypto version of capital flight.
Alongside Fantom, both the Near Protocol and Cosmos fell in value by close to five per cent, while Solana dropped by closer to six per cent. Terra, the layer 1 blockchain responsible for both the UST stablecoin and the LUNA token, had also lost close to four per cent of its value after an extremely bullish week in February 2022, before later imploding.
Smaller layer 1 networks like Harmony and Kadena were down 4.4 per cent and 4.2 per cent respectively in the same period, according to figures from CoinMarketCap.
A layer 1 network is a blockchain that can be used as a sort of base layer for building new crypto applications. It's designed with built-in tools that simplify the creation of things like non-fungible tokens (NFTs), or money markets where users can store stablecoins. Executing a transaction on the network typically incurs a fee which is denominated in a cryptocurrency native to the blockchain.
Bitcoin and Ethereum are the biggest layer 1 networks, though Ethereum is the one favoured by developers as its in-built tools make it easier for developers to code. Most of the competing layer 1 networks have their sights on Ethereum, trying to chip away at its dominance by offering faster transaction speeds and lower transaction fees.