Solana Cryptocurrency Sinks to Lowest Level Since Early November as Argentina President Becomes Embroiled in Memecoin Scandal

Solana, the sixth-largest crypto token, has lost about 25% of its market value since Feb. 14 as Argentina President Javier Milei came under scrutiny for promoting a token called Libra

Solana price crashed to the lowest level since early November as the President of Argentina became embroiled in a scandal involving a memecoin launched on the token’s blockchain.

Solana, the sixth-biggest crypto token, has seen a slide of about 25% in market value since Feb. 14. The decline comes as Argentina President Javier Milei came under scrutiny for promoting a token called Libra on the Solana blockchain.

The Solana blockchain has become popular among developers of crypto memecoins due to its low fees and fast transaction speeds. The memecoins, which are usually not tied to any product or service, are a cultural phenomenon in crypto.

However, the large number of memecoins being launched and promoted has raised concerns about liability contagion and the potential for pump-and-dump schemes.

Memecoins have seen wild price swings, with some rising rapidly and then crashing quickly. Many memecoin buyers have become victims of rug pulls, in which the coins’ creators exit, leaving others holding the bag as the price crashes.

Solana price has also been impacted by potential large sales of the token by Solana investors, with about $1.8 billion worth of the token hitting the market on March 1 due to unlocks, Elder said. Some coins granted to or purchased by certain parties can’t be sold until they unlock on a certain day.

“Many investors are front-running expected sales from those that are unlocking,” said Jeff Dorman, chief investment officer at Arca. “Further, the negative sentiment created from Pump.fun” and other parties involved “in the TRUMP, MELANIA, and LIBRA tokens have weighed on price.”

Other cryptocurrencies also took a hit on Tuesday. Bitcoin price fell below $94,000 for the first time in two weeks. Ether was down more than 5%, while altcoins such as Cardano and Chainlink were off around 9%.