Solana, a fast-growing cryptocurrency, saw its price rise by over 8% on March 7, following reports that Pantera Capital intends to buy $250 million worth of SOL tokens from the bankrupt FTX exchange.
Solana, one of the most promising cryptocurrencies in the market, experienced a significant boost in its price on March 7, attracting the attention of investors. The price rally coincided with reports that Pantera Capital, a leading crypto-focused asset manager, plans to buy a large amount of Solana tokens, or SOL, from the estate of FTX, a digital asset exchange that went bankrupt.
This marks a major move in the crypto market landscape, as it could have implications for the supply and demand of SOL.
Pantera Capital, which manages over $5.2 billion in assets, is in the process of raising capital from prominent investors, according to a Bloomberg report. The report revealed that the fund will be used to buy deeply discounted SOL tokens from the estate of FTX, which declared bankruptcy in November 2022.
The Pantera Solana Fund aims to purchase up to $250 million worth of SOL tokens, which is equivalent to about 1.7% of the total supply of SOL.
A win-win situation for Pantera and FTX
Pantera’s proposal offers an attractive opportunity for investors, as it allows them to buy SOL tokens at a 39% discount below the 30-day average price, or at $59.95. However, there is a catch: investors must commit to a vesting period of up to four years, meaning they cannot sell their tokens until then.
This strategic move is designed to ease the pressure on Solana’s token price while providing liquidity to FTX’s estate for creditor repayment. Solana’s price has soared by over 600% in the past year, making it one of the best-performing cryptocurrencies in the market. Solana’s current trading price is nearly four times higher than its value at the time of FTX’s collapse.
Therefore, FTX’s estate can use this opportunity to generate funds for creditor reimbursement, while Pantera can secure a long-term investment in a promising project.
The deal also has an interesting twist, as Sam Bankman-Fried, the co-founder and former CEO of FTX, is a major supporter of the Solana network. Bankman-Fried is the founder and CEO of Alameda Research, a quantitative trading firm that is one of the largest validators on the Solana network.
He is also the founder and CEO of Serum, a decentralized exchange that runs on the Solana network. Bankman-Fried has been vocal about his belief in Solana’s potential, as it offers fast, scalable, and low-cost transactions.
Solana’s price and popularity rise
Meanwhile, the timeline for Pantera’s fund closure was set for the end of February, with efforts to secure investments reportedly underway. However, specific details regarding the amount raised remain undisclosed.
The report also showed that the investors interested in participating in this opportunity are required to commit a minimum of $25 million each. Besides, Pantera plans to implement a management fee of 0.75% and a performance cut of 10%, as outlined in their materials.
However, as of this writing, the Solana price was up 8.50% and traded at $142.83, suggesting strong confidence in investors towards the crypto. Over the last 24 hours, the crypto has touched a high of $144.02 and a low of $126.03, according to CoinMarketCap. Solana has a market capitalization of over $41 billion, making it the seventh-largest cryptocurrency in the world.
Solana’s popularity has also risen, as it has attracted many developers, users, and projects to its network. Solana claims to offer a high-performance blockchain that can process over 50,000 transactions per second with an average fee of less than $0.01. Solana also supports smart contracts, decentralized applications, and interoperability with other blockchains.
Some of the notable projects that run on Solana include Audius, a decentralized music streaming platform; Star Atlas, a metaverse game; and Metaplex, a platform for creating and selling NFTs.
