Solana Plummets 29% Despite $10 Billion Liquidity Boost as Investors Favor Memecoins

Solana, one of the prominent altcoins, has experienced a significant price decline in 2025, falling nearly 29% since the start of the year. This downturn is particularly notable given the injection of $10 billion in new liquidity and its inclusion in the US Digital Asset Stockpile. Despite these positive developments, Solana has struggled to maintain its value, highlighting the complex dynamics at play in the cryptocurrency market.

Analysts suggest that the newly minted liquidity has not translated into a price boost for Solana. Instead, much of this liquidity has flowed into memecoins, which have seen a surge in popularity and investment. This shift in investor interest has contributed to Solana’s downward trend, as capital that could have supported SOL has been redirected towards these more speculative assets. The launch of the Official Trump (TRUMP) token, for instance, saw a significant outflow from other crypto assets as investors rushed to buy TRUMP in a fear of missing out (FOMO) frenzy.

Solana’s price decrease is part of a broader market downturn that has seen the total market capitalization of all cryptocurrencies fall nearly 17% since the beginning of 2025. This wider market decline has led investors to seek safer assets, further exacerbating the outflows from Solana. In February alone, Solana faced over $485 million worth of outflows, with investor capital primarily moving to Ethereum, Arbitrum, and the BNB Chain. This capital exodus is part of a broader trend in the crypto market, where investors are increasingly seeking safer assets amid a wave of memecoin scams and market volatility.

The flight to safety has been driven by concerns over the stability and security of various cryptocurrencies, leading to a shift in investment towards more established and less volatile assets. This trend has been exacerbated by disappointment in Solana-based memecoin launches. The launch of the Libra token, which was endorsed by Argentine President Javier Milei, resulted in a significant rug pull, where project insiders allegedly siphoned over $107 million worth of liquidity. This incident triggered a 94% price collapse within hours, wiping out $4 billion in investor capital and further eroding confidence in Solana-based projects.