Solana (SOL), the sixth-largest cryptocurrency in the world, has just sharply dropped to its lowest level since October of last year, despite many large investment funds applying for ETFs based on its spot price.
Solana Plummets Despite Good News About ETFs
According to data from CoinGecko, the price of SOL is currently only 139 USD, having evaporated 35% in the last two weeks. During trading on Tuesday, $SOL at one point fell to a low of 136 USD.
It is noteworthy that this price drop occurs even as a series of major financial institutions such as Franklin Templeton, Grayscale, Bitwise, #Canary , 21Shares, and VanEck have applied for the approval of Solana ETF from the U.S. Securities and Exchange Commission (SEC). According to Bloomberg expert Eric Balchunas, the likelihood of the SEC approving the Solana ETF is up to 70%.
Why Has Solana Plummeted?
There are many reasons for Solana's sharp decline:
🔹 Related to the controversy with Libra Token: Ten days ago, Libra – a token based on #solana – plunged 90% in just a few hours, leading to criticism of Argentine President Javier Milei for previously promoting this project on social media X. Subsequently, Milei deleted the post and denied any connection to Libra.
🔹 The downturn of the meme coin market: Recently, Solana has greatly benefited from the meme coin trend, but now this market is gradually cooling down.
🔹 Capital is shifting to safer assets: According to Mark Connors, Chief Investment Officer at Risk Dimensions, investors are currently prioritizing transparency over high returns from risky tokens.
Does Meme Coin Still Have Appeal?
Although the meme coin trend is no longer as hot as before, rumors persist that Kanye West will launch his own token, creating a wave of speculation on social media. However, this excitement is not as strong as in January when former President Donald Trump launched his own coin.
Is Ethereum "Taking the Spotlight"?
Notably, Ethereum (ETH) is performing better than Solana in this correction. Over the past month, the price $ETH has decreased by 18%, while SOL has lost as much as 38%. This indicates that market sentiment may be shifting toward safer assets.
In summary
Despite Solana facing strong selling pressure, the fact that a series of Solana ETF funds are awaiting approval remains a positive long-term signal. However, in the short term, SOL still risks falling deeper if the market continues to move away from meme coins and seeks safer investment options like Ethereum.