Solana
Solana Loses $3 Billion in Market Cap as SOL Price Falls
Solana (SOL) has been in a downtrend over the past week, reducing approximately 5% and billions of dollars in market value since yesterday.
The coin was trading at $170 on June 6, after gaining hugely over the previous 12 months. But the Solana Price slumped as low as $123.42 Monday.
SOL has declined by at least 11% over the past week, coinciding with the general fall in the value of crypto assets amid negative investor sentiment in the cryptocurrency market.
Broader market recession
Solana’s sharp decline can be attributed to a combination of market-wide factors and specific challenges facing the cryptocurrency. Additionally, Solana, generally known for its high throughput and low transaction fees, has faced network congestion and competition from other blockchain platforms.
While Solana has shown in the past that it can bounce back, recent coin trading has pulled it in both directions, said Andrew Kangco-founder of Mechanism Capital, a crypto-focused investment firm.
A growing number of celebrities have recently lent their brand names to new coins flooding the market. At least 500,000 pieces memes were launched just in May.
Kang predicted that Solana could drop to $80 “if meme trading takes a breather over the next few months.”
For Solana, the beginning of the end of coin mania might have come after right-wing internet personality Andrew Tate threatened to “CRASH THE SOLANA NETWORK.”
Tate claimed to have burned more than 38 million dollars of the Solana-based TOP G meme coin, effectively removing 58% of its supply and causing its price to rise by over 130%. Despite the large outlay, which left TOP G’s market capitalization at more than $65 million, Tate claimed he personally profited nothing from the action.
But the recent SOL decline is not happening In isolation.
Other cryptocurrencies like Ethereum (ETH), Cardano ADAand the BNB chain BNB also recorded similar losses, with Bitcoin plunges to $61,000. Meanwhile, the same parts Dogecoin (DOGE) and Shiba Inu (SHIB) saw a decline of almost 5%.
Additionally, broader financial markets have also been under pressure, with major indexes like the S&P 500 experiencing declines.
Meme coin activity notably caused an increase in trading volume on Solana. According to data from DeFi Llama, Solana’s trading volume has increased recently, largely driven by explosive interest in meme coins like TOP G, Tate’s. DAD and Australian rapper Iggy Azalea’s MOTHER.
Still, negative inflows in exchange-traded funds (ETFs) and poor macroeconomic data in previous weeks contributed to the drop, Kang said.
Legal risks for celebrities promoting meme pieces
The increase in meme coin activity has also raised legal concernsespecially for celebrities promoting these tokens.
Although meme coins can attract significant attention and financial gains, they also come with major legal pitfalls. Celebrities may face significant civil and criminal liabilities if their actions are perceived as market manipulation or if they make false or misleading statements about the tokens they endorse.
Edited by Stacy Elliott.
Editor’s note: This article was updated after publication to remove references to a misinterpreted joke.