Solana (SOL) has struggled in 2025, experiencing a 29% decline despite significant liquidity injections and its inclusion in President Donald Trump’s US Digital Asset Stockpile. According to TradingView data, SOL’s price slump comes amid a broader market downturn and shifting investor sentiment.
Solana’s Price Decline Amid Favorable Developments
Solana was named as one of the three altcoins included in Trump’s Digital Asset Stockpile, alongside Cardano (ADA) and XRP (XRP). The stockpile, designed to strengthen the US government’s strategic crypto holdings, was expected to provide a positive catalyst for Solana’s price.
Additionally, over $9.5 billion worth of newly minted USDC stablecoins have been introduced into the Solana ecosystem since January 1, 2025, according to blockchain analytics firm Lookonchain. However, despite these developments, Solana has continued its downward trajectory.
Memecoins Diverting Liquidity Away from SOL
Analysts suggest that the fresh liquidity influx has flowed into memecoins rather than directly benefiting SOL. Since the launch of Trump’s Official Trump (TRUMP) token on January 18, 2025, Solana has fallen by 49%, dropping from $261 to $133.
According to Dan Hughes, founder of Radix, this shift in liquidity was driven by extreme FOMO (fear of missing out). Speaking to Cointelegraph, Hughes explained:
“Most of the inbound liquidity was outflow from other crypto assets, people selling their crypto portfolio to buy TRUMP in extreme FOMO.”
Solana Faces Capital Outflows Amid Market Downturn
The broader cryptocurrency market has seen a 17% drop in total market capitalization since the start of 2025. Solana has been particularly impacted, with $485 million in outflows in February alone. Much of this capital has migrated to Ethereum (ETH), Arbitrum (ARB), and Binance Smart Chain (BNB), as investors seek safer assets.
According to a Binance Research report:
“Overall, there is a broader flight towards safety in crypto markets, with Bitcoin dominance increasing 1% in the past month to 59.6%.”
The report also noted that BNB Chain memecoins saw an uptick in activity, partially driven by Binance co-founder Changpeng Zhao (CZ)’s tweets about his dog, Broccoli.
Memecoin Scams Further Weigh on Solana’s Performance
Solana’s ecosystem has been hit by a series of memecoin scams, further curbing investor confidence. A prime example was the launch of the Libra token, which had been publicly endorsed by Argentine President Javier Milei.
However, insiders behind the project siphoned over $107 million in liquidity, resulting in a 94% price collapse within hours and wiping out $4 billion in investor capital. The event damaged sentiment toward Solana-based projects and accelerated capital outflows from the ecosystem.
Conclusion: Can Solana Rebound?
Despite its inclusion in Trump’s Digital Asset Stockpile and increasing stablecoin liquidity, Solana continues to face selling pressure due to shifting investor sentiment and high-profile scams. The network’s long-term growth potential remains strong, but in the short term, market conditions and capital outflows pose significant challenges.
If Solana is to recover, confidence in its ecosystem must be restored, particularly among institutional and retail investors. Whether a potential market reversal or new strategic developments can revive SOL’s price trajectory remains to be seen.
