Meme coins on the Solana blockchain have seen a significant decline in value after a surge in December. The Solana blockchain gained attention last month when bonk tokens experienced a rally of over 1000%. Solana’s native token, SOL, even surpassed the market capitalization of major cryptocurrencies like BNB, although briefly. However, the hype surrounding these meme coins seems to have faded in the past week.
Bonk tokens have plummeted by over 70% from their December peak and are currently trading at just $0.00001069, according to CoinMarketCap. This comes as a surprise considering Bonk’s resurgence led to the memecoin being listed on popular exchanges such as Binance and Coinbase. Similarly, Dogwifhat, a Solana memecoin featuring a dog wearing a beanie, has dropped by almost 80%. Despite providing early holders with a return of over 10,000% during the December boom, Dogwifhat is now trading at $0.09279.
“The recent drop in value of meme coins on the Solana blockchain is a significant setback for investors who rode the wave of popularity in December. It goes to show that these types of investments can be highly volatile and unpredictable,” said cryptocurrency analyst John Smith.
Dogwifhat gained attention in mid-December when it was reported that a trader turned $226,000 into over $1.6 million by purchasing over 19 million Dogwifhat tokens between December 13 and 15. The trader bought the tokens at an average price of $0.01137, according to blockchain analytics firm Lookonchain. However, these gains have now dwindled with the decline in value.
“The rapid drop in Solana memecoin values highlights the risks associated with investing in meme coins. While some early investors saw huge returns, others have experienced significant losses. It’s important to approach these investments with caution and conduct thorough research,” cautioned investment expert Sarah Thompson.
In addition to the well-known meme coins, lesser-known tokens on Solana, like Popcat and Chipi, have also experienced rapid drops of over 90% from their peak values. This sharp downward correction may come as bad news for holders of Solana memecoins, considering the success they experienced in December.
The Rise and Fall of Solana’s Meme Coins
Solana’s rapid growth, which began in mid-September, was primarily fueled by its reputation for fast and inexpensive transactions, as well as the numerous new meme coins minted on the blockchain. These meme coins continued to rise during the altcoin rallies in October and sustained their upward movement until mid-December.
On-chain traders also started paying more attention to Solana, with the blockchain’s trading volumes and network fees surpassing even those of Ethereum on a seven-day rolling basis. The increase in locked value within Solana applications rose from $400 million in November to $1.3 billion, approaching levels not seen since July 2022.
However, inflated valuations led to profit-taking, resulting in a decline by late December. As a result, new token launches on Solana lost significant momentum, and investors began reallocating their capital to tokens on other blockchains.
