Solana, one of the most popular cryptocurrency ecosystems, heads to a comedown by witnessing a 40% decline with a loss of $772 million in liquidity. The rug pulls of Solana-based memecoins that involve famous personalities are a major catalyst in the ongoing downtrend. According to blockchain experts, this hints that the memecoin bubble of the Solana ecosystem will burst soon.
Amidst the FUD (fear, uncertainty, and doubt), Solana still stands as the best when it comes to scalability and efficiency. It is resisting the price by moving in between $160 and $180 levels. This article explores Solana’s present condition, the issues with its memecoins, and its future movements in detail.
Is Solana Memecoin Bubble Gonna Burst?
At present, various institutional investors are detached from the Solana-based memecoin ecosystem due to its transformation into a nihilistic, hyper-gambling, extractive space. Although Solana provides the best services to launch the tokens, it has been occupied by anonymous spammers who try to plunder the crypto wallets.
While there are strong chances for the bubble to burst, the Solana blockchain can come back into the role of a prominent player as evident in previous years. After its collapse from $250 to $9 from 2021 to 2023, SOL surged back to its all-time high of $294 in January 2025. Probably, we can see these fluctuations recurring in the coming years.
Reasons for Solana’s Decline
There are various reasons for Solana, including the rug pull of famous tokens deployed on Solana such as MELANIA and LIBRA, and the changes in the regulatory frameworks. Also, numerous memecoins, were generated via the Solana-based launchpad pump which looted money from passionate investors. Let’s explore these reasons in detail.
- LIBRA Pump & Dump: The Libra issue that involves Argentine President Javier Milei drastically changed the public’s view about memecoins backed by famous personalities. He tweeted about the token and later disowned it, causing a sudden decline from $1 to $0.1. Soon after the dump, Solana’s crypto liquidity dropped from 12.1 billion dollars to 8.29 billion.
- MELANIA Issue: The MELANIA token, based on Donald Trump’s wife Melania Trump, surged to a $ 13 billion market cap within four hours of its release but lost 99% of its value over the following eight hours.
- SEC Regulations: On February 20th, the US Securities and Exchange Commission (SEC) announced its plans to launch a unit to focus on the misconduct in the cryptocurrency realm. This will possibly create regular audits in the Solana chain, detaching users who radically believe in decentralization.
- Increase in Scams: One of the major scams witnessed in the cryptocurrency industry is rug pull, in which the developers abandon a project and withdraw all the funds. Apart from the ultra-viral coins, we can see small-scale occurrences of rug pull in the Solana blockchain, which increased lately.
Future of Solana-based Memecoins, Expert Opinions
Memecoins heavily depend on trends where a short-lived narrative is spread through social media to attract investors. This is further enhanced by mainstream media attention. However, sudden hype usually fades away, and the late investors, mostly small-cap individuals, lose their funds.
According to Dom Harz, the co-founder of Build on Bitcoin (BOB), the high-profile issues caused the memecoin frenzy to cool down. Travis Kling, the founder of Ikigai Asset Management, said “People have been calling it crime season. People have been referring to it as such ever since Trump introduced his memecoin”.
While many experts believe that the memecoin mania has pushed the cryptocurrency industry into a level of absurdity that can no longer be ignored, others opine that the niche has so much potential to rise in the future.
Final Thoughts
As we mentioned earlier, Solana blockchain has the ability to rebound after the occurrence of any huge bleedings in the chart. The believers in its abilities have decided to hodl SOL for the long term. The current bull market will probably fade away and the following bear market will again be replaced by another bull run. If you plan to invest in Solana right now, please try to do as much research as possible. Prior to making any financial decisions, always do your own research. At the time of writing, $SOL is trading for $173.69, a 10.94% decline this month.
