Last week crypto had one of its worst weeks ever, with Bitcoin dropping to an 18-month low, falling below $23,000, after it tumbled 15% in only 24 hours. As of this week, Bitcoin has tumbled even further, hitting a low of near $17,000 on Saturday, and currently sitting around $20,000. The sell-off in crypto came in reaction to headwinds caused by rising interest rates, inflation, and the broader fear of recession. Moreover, because all of these drops occurred in such a short timeframe it could point towards a broader and more fundamental mistrust in crypto, and the platforms supporting them. In short, what was already a steep decline has become a full-blown panic sell.
One major blockchain called Solana has faced major issues in light of the sell-off. Specifically, a project called Solend, which is built on the Solana blockchain, has struggled to maintain balance. The DApp is a lending platform and it recently attempted to gain control of its largest accounts, known as “whale investors.” The reason for this is because these accounts significantly influence market movements. Specifically, Solend has explained this as one single whale sitting on an “extremely large margin position,” which puts the entire protocol and its users at risk. So far, Solend’s users have voted to block the move.
What do you think about Solend’s situation and will Solana collapse if this whale makes a move different from what they hope?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.