Solana’s price has been declining, especially following the launch of a new memecoin called Trump (TRUMP). While it has shown some signs of recovery after a major token unlock, Solana’s price continues to drop.
Solana Price Falls 45% After Memecoin Debut
Since its debut on January 18 with TRUMP, the value of Solana has fallen 45%, from about $261 to around $143 as of March 2. Analysts point to the growing popularity of memecoins as possibly one of the reasons for the fall. Memecoins are small, enjoyable tokens that tend to generate much hype and excitement, which sometimes causes investors to transfer their funds into them.
Memecoins Stealing Liquidity from Solana
Memecoins simply siphon money from other cryptocurrencies, according to Dan Hughes, the owner of a decentralized finance platform. For instance, when individuals were excited about the TRUMP memecoin, individuals sold existing crypto assets in order to invest in it, as opposed to attracting new money. Hughes described it as a “liquidity vampire,” and it refers to the fact that memecoins drain money from other crypto assets such as Solana.
Even though USDC, the cryptocurrency, was minted in huge amounts, the price of Solana declined nonetheless. Circle, the creator of USDC, issued $8.75 billion worth of USDC since January 1, but Solana saw only a small rebound, still trading at around $140 amid all these fresh capital pouring into the market.
Solana's recent price struggles echo hard choices for investors. With new contenders like Sui and Dawgz AI on the rise, is Solana still worth the hype? Let's break down its competitive edge. #Solana #Crypto @WhoMadeMoney pic.twitter.com/WgQAHbzdbW
— WhoMadeMoney (@WhoMadeMoney) March 3, 2025
The Token Unlock and Market Concerns
On March 1, Solana also experienced its largest token unlock in history, unleashing more than 11.2 million SOL tokens on the market. This caused some concern among investors since most of these tokens had been purchased at lower prices by large companies.Solana was able to hold its price above $140, however, despite the issues.
Outside Factors Affecting the Market
There are other issues that are affecting the market too. Macroeconomic events and security issues, like the February Bybit hack, are making investors more risk-averse. Hughes stated that, unlike previous years, there are more institutional investors in the market now. Institutional investors are more cautious and take into account a broader set of factors before making a decision. In addition, events such as hacks and rug pulls (scams) have caused investors to be cautious, leading them to hold back.
Overall, although Solana is struggling, it is still demonstrating some resilience. Yet, the increasing popularity of memecoins and other external influences could still affect its price.
