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Long SOL, Short SOL
SOL has undergone a healthy rise in prices lately. As you can see below, price has increased even though open interest has dropped which is a sign that the price appreciation has been led by spot buys.
Historically, SOL has demonstrated a trend of exceeding performance expectations leading up to the Breakpoint conference, followed by a tendency to underperform subsequent to the conference's commencement. In 2022, this pattern was disrupted due to the sudden collapse of FTX, which had a significant impact on price performance.
At least in the short term I’d recommend going long SOL into Breakpoint and short thereafter.
Another thing to consider is the ongoing estate sales of FTX, administered by Galaxy Digital, is likely to persist as a detrimental factor influencing SOL. The estate possesses 56 million SOL, valued at approximately $1.7 billion, with around 30% of it already vested. This sizeable holding will, in due course, be converted to fiat.
I’m optimistic on SOL long term. I think there’s a place for non EVM chains and more importantly the performance & cost (aside from network stability) still cannot be superseded by any other chain at the moment.
I just don’t think it’s wise to be delirious about valuations like the recent one from VanEck considering there’s a sizeable overhang from FTX estate sales and also upcoming competitors like Monad.