On a somewhat mixed day for the crypto market, several cryptocurrencies fell for an array of different reasons, which isn’t always the case in the crypto industry, where the price of Bitcoin (BTC 0.50%) typically drives much of the action.
Since late afternoon Tuesday, the price of Solana (SOL -3.85%) was down by about 4.3% as of 1:40 p.m. ET Wednesday. Meanwhile, the price of Bitcoin SV (BSV -11.81%) traded roughly 9% lower, while the price of Sandbox (SAND -4.34%) was down about 4.5%.
Popular online brokerage Robinhood (HOOD 0.06%) announced Wednesday that it would end its support for Bitcoin SV on Jan. 25 just before 7 p.m.
Bitcoin SV was created after a hard fork from Bitcoin Cash (BCH -0.11%), which itself had done a hard fork from the original Bitcoin. The hard fork for Bitcoin SV was intended to try and replicate the original Bitcoin protocol. Robinhood did not specify why it would no longer support the token, simply saying: “We regularly review the crypto we offer on Robinhood. Based on our latest review, we’ve decided to end support for Bitcoin SV.”
Robinhood does engage in a thorough vetting process of the cryptocurrencies offered on the platform, mainly with the goal of ensuring that it’s not listing unregistered securities. While I don’t know if that is the reason it’s removing the Bitcoin SV token, the action does make me think the company has some kind of regulatory concern.
While I can’t say with certainty what is driving the sell-off in the SAND token, it appears to be linked to investors anticipating the upcoming release next month of 348 million SAND tokens, which are currently valued at around $174 million.
Sandbox is an ERC-20 token that runs on the Ethereum (ETH 0.06%) blockchain and is used to facilitate transactions in the Sandbox, a blockchain-based metaverse. When investors know that new supply of a token is about to flood the open market, it’s not uncommon for the asset to sell off in anticipation.
Solana looks to be selling off due to investors taking profits after a strong run late last weekend and into the early part of this week. Solana seemed to take off after the meme token BONK (BONK 0.15%), which is minted on the Solana blockchain, got hot recently.
The initial drop of BONK, which is attempting to mimic the successes of Shiba Inu (SHIB -3.82%), was made to members of the Solana community. BONK has had some big price spikes already, so Solana’s volatility might be related to its association with the meme token.
It’s always interesting to have a day when cryptocurrencies break away from the broader market and trade a certain way due to events specifically impacting their token or blockchain network.
Of these three, I really only like Solana as a long-term investment because of its blockchain’s ability to process tens of thousands of transactions per second, although I’d rather it not trade in a correlated fashion to a new meme token.
Investors in this space should keep an eye on the new inflation data that’s being released Thursday morning. Those government reports have the potential to move the crypto market in a big way.