Solana (SOL) has suffered a steep decline in early 2025, plunging over 40% within a month. A combination of political controversy, market sell-offs, and memecoin volatility has shaken investor confidence in the network.
A major catalyst for this decline was the involvement of Argentine President Javier Milei, who openly endorsed LIBRA, a Solana-based memecoin. Initially perceived as a strong backing from a world leader, LIBRA’s market cap quickly crashed from $4.5 billion, losing 90% of its value. The token turned out to be a pump-and-dump scheme, leaving many retail investors with losses.
This collapse triggered panic selling across the Solana ecosystem, wiping out its recent gains. The controversy deepened as Milei faced legal action, with Argentine lawyers filing multiple lawsuits alleging financial misconduct.
Despite the turmoil, some analysts remain hopeful. VanEck, Bitwise, and Pantera Capital still see potential for Solana, with VanEck predicting SOL could reach $520 by the end of 2025—if institutional demand outweighs recent setbacks.
XRP’s Slump: Regulatory Uncertainty and Political Disappointment
XRP’s decline, unlike Solana’s, has been driven by ongoing regulatory challenges and political uncertainty. The token has dropped 3.6% to $2.59, marking a 19% decline in the past month.
One of the primary concerns revolves around the SEC’s ongoing scrutiny. Hopes were high for an XRP Exchange-Traded Fund (ETF), which would enable institutional investors to gain exposure without directly purchasing the token. However, the SEC has repeatedly delayed its decision, leaving investors in limbo.
The regulatory uncertainty has been compounded by the Trump administration’s ambiguous stance on crypto. Despite initial campaign promises hinting at pro-crypto policies, such as a potential Bitcoin strategic reserve, recent actions—including fresh tariffs on Canada, Mexico, and China—have dampened investor sentiment.
ETF Hopes: Could Solana and XRP Bounce Back?
While the current outlook appears bearish, potential ETF approvals could shift momentum for both XRP and Solana.
The SEC is currently reviewing multiple XRP ETF applications from major firms like Grayscale and Bitwise. If approved, institutional capital could drive significant liquidity into the market, potentially reversing XRP’s decline.
Similarly, there is growing interest in a regulated Solana ETF. While this could help restore confidence in the network, the LIBRA scandal and legal issues surrounding Milei may complicate regulatory approval.
Investors Proceed with Caution
Despite long-term potential, the short-term outlook for both Solana and XRP remains volatile.
Solana continues to experience the aftershocks of the LIBRA controversy, and further collapses of memecoins within its ecosystem could raise concerns about its ability to support legitimate projects. Meanwhile, XRP remains stuck in regulatory limbo, with its price unlikely to see major gains until there is clear approval from US regulators.
For now, crypto investors should brace for further turbulence. With political scandals, regulatory roadblocks, and market jitters all at play, the coming months will be crucial in determining the future of Solana and XRP.
One thing is certain: the crypto market remains as unpredictable as ever.
