Key Points:

• Solana Declines Despite Support: Solana has fallen 29% in 2025, even after being included in President Trump’s Digital Asset Stockpile.
• Liquidity Fails to Boost Price: Over $10 billion in new liquidity and $9.5 billion in newly minted USDC have not stopped Solana’s downtrend.
• Market-Wide Selloff & Investor Caution: Broader crypto market downturn and concerns over memecoin scams drive investors to safer assets.

Solana’s Price Slump Persists

Solana (SOL) has faced a steep decline in 2025, dropping nearly 29% despite favorable developments, including its inclusion in President Donald Trump’s Digital Asset Stockpile. TradingView data confirms that the altcoin, alongside Cardano (ADA) and XRP, was selected for the US-backed crypto reserve but has struggled to gain momentum.

The price dip comes despite a significant injection of liquidity into the market, with over $10 billion added and $9.5 billion in newly minted USDC stablecoins since January 1, 2025, according to crypto intelligence platform Lookonchain. However, analysts believe this liquidity has largely flowed into memecoins instead of supporting Solana’s value.

Trump Token Surge Redirects Capital

Another key factor in Solana’s decline is the massive influx of capital into the newly launched Official Trump (TRUMP) token. Since its launch on January 18, Solana has plummeted 49%, from $261 to $133 as of March 9. Dan Hughes, founder of decentralized finance platform Radix, noted that much of the new liquidity in the crypto market stemmed from investors selling their portfolios in a frenzy to buy TRUMP tokens.

This trend mirrors the broader market downturn, where the total cryptocurrency market capitalization has fallen by 17% since the beginning of the year.

Investors Flee Amid Security Concerns

Investor sentiment towards Solana has also been dampened by increasing concerns over memecoin scams. In February alone, Solana saw capital outflows of $485 million, with funds shifting toward Ethereum, Arbitrum, and the BNB Chain.

A Binance Research report highlighted a growing trend of investors seeking “safe” assets, with Bitcoin dominance rising by 1% to 59.6% in the past month. Meanwhile, part of the liquidity shift was influenced by BNB Chain’s memecoin activity, fueled by Binance founder CZ’s social media posts about his dog, Broccoli.

Adding to the turmoil, investor confidence in Solana-based memecoins was further shaken by the collapse of the Libra token. Endorsed by Argentine President Javier Milei, the project reportedly saw insiders siphon $107 million in liquidity, triggering a 94% price crash within hours and wiping out $4 billion in investor capital.

Conclusion

Despite being recognized as a major altcoin by the US government and receiving billions in new liquidity, Solana remains in a downward spiral. Market-wide selloffs, capital flight to safer assets, and the rise of memecoin-related scams continue to weigh on its price performance. Investors will be watching closely to see if Solana can break this bearish trend in the coming months.