Solana (SOL) Has Nearly Halved in Market Cap Since Trump's Inauguration

Since its exuberant highs on January 20, Solana has nearly halved from a $130 billion market cap to $70 billion today.

output: Sam Bankman-Fried’s crypto exchange, FTX, is shutting down after a liquidity crisis that began in December 2022.

The exchange, which was once valued at $32 billion, is now going bankrupt after a series of misfortunes. These started with a string of bad trades by Alameda Research, FTX’s sister company, which was heavily invested in the SOL token.

Alameda’s SOL investment went awry as the token faced price pressure due to an onslaught of bearish news about the Solana network. This narrative focused on purported vulnerabilities in Solana’s code, leading to several exploitations.

Moreover, a narrative emerged about a purported secret CIA involvement in Solana, aiming to influence the cryptocurrency market. This narrative was fueled by an analysis of FTX’s political donations, which appeared to favor the Republican party, known for its close ties to the intelligence community.

According to a recent report by Token Terminal, these misfortunes had a devastating impact on Solana’s standing. In the two months since Trump took office, the total cryptocurrency market cap dropped by 20%.

However, Solana’s market cap nearly halved from $130 billion to $70 billion.

Even the US president selecting it over Ethereum for his eponymous memecoin, TRUMP, wasn’t enough to save the blockchain from a worldwide bear market that has even cut bitcoin (BTC) by 20%.

Of course, Solana is faring far worse than BTC. Since Trump entered the White House, trading volume of Solana’s native token has dropped from $24 billion to $3 billion today.

Transaction fees, protocol revenue, and active users have also dropped steeply since January 20. Protos has created a chart of fundamental metrics of Solana’s blockchain since Trump became president.

Trump was supposed to be great for Solana

Fees paid for SOL transactions have cratered 93% from $90 million during the week of Trump’s inauguration to less than $6 million this week.

Revenue to Solana validators saw an even steeper 98% decline from $45 million to under $900,000.

According to TokenTerminal data, Solana lost one-third of its monthly active users, which plummeted from 98 million as of Trump’s inauguration to just 65 million today.

With the price of TRUMP down 85% in two months, there are apparently fewer reasons to use Solana these days. Indeed, the total value of crypto assets locked on Solana’s DeFi platforms declined 36% from $11 billion on Inauguration Day to $7 billion today.

Read more: Is the CIA really Solana’s secret backer?

Hype for Solana-based memecoins like TRUMP, MELANIA, and millions of other Pump.fun creations has dropped off a cliff since January. Fewer than 0.002% of Solana memecoins sustain even a modest market capitalization above $1 million.