Crypto News

Solana Faces Major Price Decline Despite Inclusion in Trump’s Digital Asset Stockpile

March 10, 2025
Smart Money

Solana’s Price Decline Continues Despite Inclusion in Trump’s Digital Asset Stockpile

Solana (SOL), one of the few altcoins recently included in President Donald Trump’s Digital Asset Stockpile, is facing significant price challenges as it experiences a nearly 29% decline since the start of 2025. This drop persists despite receiving a considerable influx of liquidity amounting to $10 billion, according to data from TradingView.

Overview of Solana’s Situation

Since January 1, 2025, Solana has struggled to maintain its value, with the SOL token now trading significantly lower than earlier this year. Joining Solana in the Digital Asset Stockpile are Cardano (ADA) and XRP, but even this endorsement has not been enough to stabilize its price, which has seen a steady decline. The SOL token has fallen from $261 at the time of the Trump coin launch on January 18 to $133 by March 9, illustrating a staggering 49% decrease.

New Liquidity and Market Dynamics

Despite the injection of freshly minted USDC (a popular stablecoin) valued at over $9.5 billion since the beginning of the year, analysts indicate that much of this liquidity may not be benefiting Solana directly. Instead, reports suggest that a significant portion of the new liquidity is flowing into more speculative investments, such as memecoins. Prominent figures in the crypto community, including Dan Hughes, founder of decentralized finance platform Radix, highlighted that during the Trump coin launch, much of the new liquidity appeared to come from investors selling off their existing crypto portfolios out of fear of missing out, further complicating Solana’s market position.

Broader Market Trends Impacting Solana

The current downturn is not isolated to Solana alone but is characteristic of a broader market trend, where the total market capitalization of all cryptocurrencies has decreased by approximately 17% since the onset of 2025. Additionally, investors are reported to be seeking safer assets amid recent scandals involving memecoins. For instance, Solana recorded over $485 million in capital outflows in February, with these funds predominantly shifting towards Ethereum, Arbitrum, and the BNB Chain. A recent Binance Research report elaborated on this trend, citing a growing "flight to safety" among cryptocurrency holders.

In conjunction with these market movements, Bitcoin’s dominance has increased to 59.6%, suggesting that investors may be prioritizing established cryptocurrencies over altcoins like Solana.

Investor Sentiment and Memecoin Scams

Investor sentiment regarding Solana has also been dampened by recent controversies surrounding memecoins, particularly the Libra token. Supported by Argentine President Javier Milei, the project experienced a severe rug pull that resulted in a loss of over $107 million, culminating in a dramatic 94% price collapse. Such incidents have contributed to a more cautious approach among investors, leading them to favor assets with a more secure reputation.

Conclusion

As Solana continues to grapple with its declining price in the face of substantial market challenges, investors are urged to remain vigilant. The interplay of new liquidity influxes, broader market trends, and the fallout from memecoin scams will likely continue to influence Solana’s trajectory in the near future. While its inclusion in the Digital Asset Stockpile presents an opportunity, it remains to be seen whether this recognition will help reverse the current downward trend.