What happened

Solana‘s (CRYPTO: SOL) the cryptocurrency saw massive sell-off on Tuesday due to a network outage, but is rebounding in trading on Wednesday. The price per SOL token increased by approximately 6% on the day of 5:45 p.m. EDT.

Solana’s blockchain network went offline on Tuesday due to high transaction volume, but the team was able to fix the issues fairly quickly and the price of its crypto token subsequently recovered. It also appears that investors are ignoring some potential tax and regulatory changes that could impact the broader crypto space.

Image source: Getty Images.

So what

Major cryptocurrencies came under price pressure earlier in the week as Democrats in the House of Representatives proposed tax changes that would cause the IRS to treat crypto tokens as securities rather than goods. This would mean that cryptocurrencies would be subject to blank sale rules, closing a loophole that would allow traders to engage in short-term transactions while treating loss-making sales as tax-deductible events.

This was followed by comments from SEC Chairman Gary Gensler during a Senate hearing on Tuesday, indicating that stablecoins and crypto lending and staking services may soon fall under the purview of the agency. regulations.

Following new regulatory concerns, Tuesday’s grid outage added another significant negative catalyst, and SOL’s price per token fell about 7% on the day. However, the development team brought the network back online after around 5 p.m., and investors seem to view the current batch of potential tax and regulatory changes as having a relatively minor impact on the crypto space.

Now what

Solana’s blockchain network has seen increasing adoption for projects including the development of non-fungible tokens (NFTs) and decentralized funding initiatives including trading platforms. The incredible price growth of the SOL token has made it the seventh largest crypto currency by market cap, and it now has a market cap of around $ 46.7 billion.

The continued adoption of Solana could help push the token up, but investors should also take into account the incredible recent run of SOL and understand that it is certainly a high-risk game, even if it does. may still have big advantages on the table.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About The Author

Al Worden

Related Posts

Leave a Reply

Your email address will not be published.