Solana (SOL) Drops Nearly 29% Since the Start of 2025 Despite Massive Liquidity Inflows

Despite being one of the three altcoins selected for US President Donald Trump's Digital Asset Stockpile

Solana (SOL) has experienced a sharp downturn in 2025, dropping nearly 29% since the start of the year despite massive liquidity inflows and its inclusion in the US Digital Asset Stockpile.

According to TradingView data, Solana’s decline comes amid broader market struggles and shifting investor sentiment. The cryptocurrency, which reached a 2024 high of $504 in August, has since fallen to $133.

Despite being one of the three altcoins selected for US President Donald Trump’s Digital Asset Stockpile—alongside Cardano (ADA) and XRP—Solana has failed to capitalize on its increased exposure.

Moreover, over $9.5 billion worth of newly minted USDC stablecoins have entered the market since January 1, 2025, as Lookonchain reports. However, this liquidity does not seem to have flowed into SOL, with a greater portion going into memecoins.

The launch of Trump’s Official Trump (TRUMP) token on January 18 exacerbated Solana’s losses. Since the launch, SOL has plummeted 49%, dropping from $261 to $133 as of March 9.

According to Dan Hughes, founder of Radix, the liquidity surge during the Trump coin launch largely resulted from traders selling other crypto assets to chase TRUMP in a frenzy of FOMO-driven speculation.

"The price of Trump went up 1,000% in 24 hours as trillions of USDC flowed into the pool," Hughes explained in a recent blog post. "It appears that, in the process, a large amount of liquidity was pulled from other chains, notably Solana, and from other coins, notably Solana-based memecoins."

Solana's struggles have been further compounded by an increasing trend of investors seeking safer assets. The wider cryptocurrency market has experienced a 17% decline in total market capitalization since the beginning of 2025.

A Binance Research report indicated that Solana suffered over $485 million in outflows in February, with capital migrating toward Ethereum, Arbitrum, and BNB Chain. The report also noted that Bitcoin dominance increased by 1% over the past month to 59.6%, reinforcing the broader risk-averse sentiment among investors.

"The majority of the outflows occurred in February, with a total outflow of $485 million in the month, mainly to Arbitrum, BNB Chain, and Ethereum," the report stated.

Furthermore, Solana's reputation took a hit following a series of memecoin scams. One of the most notable instances was the Libra token rug pull, which was endorsed by Argentine President Javier Milei. Insiders allegedly drained $107 million in liquidity, causing a 94% price crash and erasing $4 billion in investor capital. These incidents have deterred investors from Solana-based memecoins, contributing to the bearish sentiment surrounding SOL.