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Investigation Rumors Spark Market Concerns

Crypto analyst Crypto Bitlord, with 328,000 followers on X (formerly Twitter), recently claimed that Solana (SOL) is under investigation. Although unconfirmed, this rumor has already caused SOL’s price to drop. If true, Solana could experience a selloff similar to XRP’s fate after its SEC lawsuit.



Widespread Worry

Despite the lack of verification, Bitlord’s post has gained over 600,000 views, indicating significant concern among investors. The analyst warned that many investors might be caught off guard, recalling his involvement in the failed project MOLLY, which raised $5 million.

Market Impact

If the investigation is confirmed, Ethereum could benefit. Recently, the US SEC ended its investigation into Ethereum, allowing for spot Ethereum ETFs. Comparatively, Solana could face prolonged consolidation similar to XRP’s experience with the SEC.

Current Price Analysis

The analyst predicts that SOL’s price could fall below $10 if the investigation is publicized. Solana has already seen a 20% decline in the last two weeks, trading around $127. With a fully diluted valuation of about $73 billion and a daily trading volume of around $2.5 billion, Solana has been correcting over the past three months.

Regulatory Challenges

Crypto Bitlord hinted at a potential investigation into Solana, but details about the jurisdiction or agency remain unclear. Since the collapse of FTX in 2022, the US has intensified its crackdown on the cryptocurrency industry, leading to numerous lawsuits against industry executives.

Parallels to XRP

Solana’s situation is likened to XRP and Ripple, which have been embroiled in a legal battle over the sale of digital assets. The SEC previously labeled SOL as a security, raising legal concerns. The SEC has also sued Binance and Coinbase for trading unregistered securities.

Expert Opinions

Legal expert Drew Hinkes noted that the Ethereum 2.0 investigation’s favorable outcome might not apply to other Proof-of-Stake (PoS) tokens like Solana. He suggested that Solana’s circumstances might differ from Ethereum’s, leaving it more vulnerable to regulatory scrutiny.

Future Outlook

As the crypto community awaits further developments, Solana’s future remains uncertain amidst speculation and regulatory pressure. The ongoing market volatility and potential investigation could significantly impact SOL’s price and investor confidence.

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