Solana Struggles As New Data Shows Dramatic Drop As reported by Fortune, the decline in Solana’s value can be attributed to its association with recent celebrity-backed memecoin scandals, particularly the LIBRA incident. This cryptocurrency surged to a nearly $5 billion market cap before crashing, following promotion from Argentine President Javier Milei, whose involvement has sparked outrage and prompted an investigation. Related Reading: Avalanche (AVAX) Overextended—Is A Market Shakeup Imminent?
Zach Pandl, head of research at the crypto asset manager Grayscale, noted that this incident has highlighted the volatility and risks associated with memecoins, stating, "The current phase of memecoin trading on Solana is over.” Solana’s rise as the preferred blockchain for memecoin development was largely due to its low transaction costs, high transaction speeds, and user-friendly infrastructure. Platforms like Pump.fun facilitated the rapid creation of cryptocurrencies on Solana, leading to a peak of over 71,000 memecoins launched in a single day.
Analysts Warn Of Potential Drop Below $100 While many memecoins lack intrinsic value and are often linked to scams, Pandl suggested that the recent memecoin frenzy had some positive impacts on the Solana ecosystem. "It onboarded users, generated revenue, and helped stress test the Solana blockchain in various ways,” he explained.
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