Solana Drops 8.8% Following LIBRA Meme Coin Crash

Solana (SOL) is down 8.8% in the past 24 hours, hitting $169.01 following a series of controversies relating to meme coins based on its blockchain, including LIBRA and Harry Bolz (HARRYBOLZ).

This represents SOL’s lowest price since mid-December, per data from CoinGecko. The cryptocurrency is now down 16.5% week-on-week and 39.1% since this time last month.

LIBRA, a Solana-based meme coin, lost the vast majority of its value earlier this week after it was endorsed and then disowned by Argentine President Javier Milei, shedding over $4.4 billion in market capitalization just hours after launch.

Milei now faces fraud charges, while the LIBRA project itself has been dogged by accusations of insider trading. Blockchain sleuths have also traced connections between the token’s issuers and those of U.S. First Lady Melania Trump’s meme coin, MELANIA.

Numerous other Solana-based meme coins have been embroiled in controversy and price instability in recent weeks. One meme coin, Harry Bolz (HARRYBOLZ), skyrocketed 54,637% before rapidly declining, after Tesla CEO and X owner Elon Musk briefly changed his name on the social media site to match the meme coin.

Meanwhile, another Solana meme coin, Vigilante (VIGI), surged before tumbling 69% in just a few hours, after a man was apprehended while climbing the iconic Hollywood sign in an attempt to promote the coin.

Token unlock incoming

But meme coins aren’t the only forces that may be driving negativity among speculators. On March 1, 11.2 million SOL tokens (valued at $2.06 billion at the time of writing) are set to be unlocked, as a result of auctions from the November 2021 crash of FTX. Firms that purchased SOL following the liquidation of FTX’s estate will now be able to sell their coins, purchased at deflated prices.

Though some investors may be souring toward Solana, at least in the short term, its ecosystem has seen several key wins in recent weeks. The Solana network recently marked a full year without an outage, something that was a serious recurring issue for the blockchain in its earlier years, such as 2022.

And despite short-term pessimism, some asset managers remain extremely optimistic about the longer-term prospects of the coin. Asset manager VanEck predicted that SOL will reach a high of $520 by the end of 2025, as a result of capturing a higher share of the smart contract blockchain market and increasing market share in DEX volumes.