Preparing for the Solana sell-off: Grayscale's unlocking in 2025 could shake the market

On Thursday, as the cryptocurrency market showed signs of recovery, Solana (SOL), one of the top altcoins, surged to $200, reflecting an 8% increase in the past 24 hours. This rally brings the sixth largest cryptocurrency by market capitalization closer to its all-time high reached in November 2024. However, market experts warn that Solana may face significant pressure in the coming days. Con dao hai lưỡi cho các nhà đầu tư Solana Ben Lilly, a market analyst at Jarvis Labs, recently highlighted potential risks associated with the 'Grayscale Effect.' In a social media post, he warned that the unlocking of Grayscale SOL tokens could create significant selling pressure for this altcoin. Grayscale, a well-known digital asset management company, enforces asset protection policies for 12 months after acquisition. As the two main unlocking phases approach - from January 24th to February 2nd and from July 24th to August 7th - Lilly warns investors to be cautious. The mechanism of Grayscale Trust is similar to what has been seen in the past with Grayscale Bitcoin Trust (GBTC). In that case, investors will buy Bitcoin (BTC) through Grayscale, which will hold the assets for a period of time before issuing shares. This creates an insurance fee, in which stocks are traded at a higher price than the actual Bitcoin price, leading to a significant market increase. However, when that insurance fee disappeared, it marked the peak of the market in 2021, leading to a series of bankruptcies of companies such as Three Arrows Capital, BlockFi, Celsius, and Voyager. Potential price drop coming for SOL price Lilly pointed out that Grayscale is currently executing a similar strategy with Solana, and the upcoming unlocking may reflect past volatility in the cryptocurrency market. The analyst notes that previous large SOL token purchases have seen unlocked private sale rounds since late July 2024, during which time the price has dropped 40% in just ten days. The concern is that a similar trend could emerge with the unlocking in January 2025, potentially leading to a significant sell-off. Analysis suggests that when investors benefit from their past equity stake sales, they may flood the market, creating downward pressure on SOL prices. Lilly recommends Solana holders to consider selling before the unlock date on January 24th as this could be a significant turning point for this asset. Although the Grayscale Trust for Solana is relatively small compared to SOL's overall market capitalization, the potential impact on price cannot be ignored. According to Lilly's analysis, historical trends show that even small unlocking events can significantly affect market behavior. He asserts that although the upcoming selling pressure may not lead to catastrophic losses, it could lead to local peaks and reduced insurance fees. DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)