Solana Price Decline Amid Meme Coin Fatigue

Solana’s price fell to its lowest point in over a year on Monday, dropping to $118, as meme coin traders on Pump.Fun showed fresh signs of heightened fatigue.

The platform allowing users to launch meme coins on Solana became a hub for tokens last year. However, Pump.Fun’s activity has decreased since Argentina’s President Javier Milei endorsed a Solana-based meme coin called LIBRA last month.

While Pump.Fun’s daily fees hit an all-time high of $15.5 million in January, this figure plunged 99% to $117,000 on Sunday, according to a Dune dashboard. Daily active addresses on Pump.Fun halved to around 146,000 from 290,000.

Since its launch last January, Pump.Fun has generated nearly $585 million in cumulative revenue, but prediction market users on Myriad Markets currently doubt that figure will exceed $615 million by the end of this month (Note: Myriad Markets is owned by Decrypt’s parent company, DASTAN).

Solana’s price has been shaken by a “perfect storm” of bad news, according to Matthew Nay, a research analyst at Messari. He mentioned that controversy surrounding meme coins has negatively impacted Solana’s price, in addition to fears of newly unlocked tokens.

When FTX collapsed in 2022, the exchange’s bankruptcy left it with millions of locked Solana tokens. Although much of those holdings were auctioned off, the bankruptcy estate saw 11.16 million Solana unlocked earlier this month according to Messari data.

This development released around $1.3 billion worth of Solana, creating negative sentiment as former President Donald Trump’s trade war continues to affect broader markets. Nay expressed that Solana might be “a little oversold,” noting that the unlock schedule was “actually already priced in.”

Meme coins have been a significant pull for Solana over the past year, but interest has also surged due to applications for exchange-traded funds with the U.S. Securities and Exchange Commission. Experts believe Solana has strong chances for approval, but Nay noted that a spot Solana ETF appears to be lower on the SEC’s priority list compared to other matters being considered by lawmakers.

“I think a couple of things on their priority list are ahead of the Solana ETF,” Nay stated, alluding to a market structure bill currently being evaluated. He predicted the SEC would approve a spot Solana ETF in the second half of this year.

In the meantime, although interest in Solana may wane, Nay believes it will capture significant activity when it rebounds. “Solana had a meme coin summer, and the tokens generating revenue around Pump.Fun will always be present in crypto.”

Edited by James Rubin