Is It the End of the Road for Solana?

With the price of Solana (SOL -2.89%) crashing by 34% in the past 30 days, many investors are either looking for the exit or already well on their way out the door. Rocked by scandals connected to coins on the Solana platform and facing down a few macroeconomic headwinds, it’s obvious that Solana’s seas might be rough for a while.

So is this it? Is the chain’s heyday giving way to a full-on collapse? Not so fast.

These problems are painfully thorny, but they’re survivable

Solana is the biggest casino for betting on meme coins, which attract a lot of capital from retail investors, making it an appealing place for shady schemes. It has a reputation as being the go-to blockchain for doing unethical and possibly illegal activities like pump-and-dump scams and insider trading. This is a bad reputation to have.

It’s worse when that reputation gets confirmed in more than one big way in a short period.

For instance, in mid-February, the president of Argentina, Javier Milei, publicly endorsed a newly launched Solana-based meme coin called LIBRA via his social media account. The coin subsequently crashed by around 94% after extensive insider selling, evaporating an estimated $4.4 billion in value for holders and sparking an anticorruption investigation.

This meme coin collapse comes on the heels of several others earlier in the year, including President Donald Trump’s Solana-based Official Trump meme coin, which has the ticker TRUMP and currently trades at a small fraction of its peak value shortly after launch in late January. According to reports, the coin’s insiders sold off large portions of their holdings during the initial run-up, and they continue to retain large portions of the outstanding supply, suggesting that those who buy it now will be massively disadvantaged despite its lower price level.

Then there’s the upcoming issue of supply unlocks for the Solana coin itself, which will occur in early March. Approximately 11 million tokens will be unlocked, which means that early investors in the chain will be able to sell for the first time, if they want to. Many investors have interpreted this as a very bearish signal, expecting the newly unlocked coins to be immediately offloaded, depressing prices substantially.

The size of such unlocks has also been a point that Solana’s detractors have criticized in the past, so the timing is quite unfortunate given the other ongoing issues.

Buying the dip will probably pay off, and perhaps soon

Investors should carefully examine the above reasons to be bearish about Solana right now. It’s reasonable to expect that the coin’s price will take some time to recover, but that isn’t the whole story.

It’s true that recent celebrity meme coin catastrophes are not going to do investors any favors. And the prospect of more coins being available for the chain’s early investors to dump isn’t a very appealing one. But those issues don’t have anything to do with the core investment thesis for buying the coin. And that makes the dip that’s happening now an opportunity rather than a long-term threat.

From the long-term view, Solana may soon be included in exchange-traded funds (ETFs), and it might even be included in a U.S. cryptocurrency repository, if one is ever made. It’s also still dramatically faster and cheaper to use than its biggest competitors, Ethereum and Cardano, neither of which are likely to be able to change that state of affairs anytime soon.

Furthermore, despite the recent plunge in meme coin valuations, Solana is still the main chain for them, which will keep risk-seeking investors coming back again and again. More serious segments, like artificial intelligence (AI) infrastructure and on-chain AI agents, are also blossoming right now, and they may soon drive significant demand for the coin.

Rumors of Solana’s demise have been very much exaggerated. The near term could still be challenging for investors, but for those who can commit to holding through volatility long enough for its big value drivers to play out, buying the dip is a good strategy.