Solana’s 2025 Slump: Is the Party Over?

At the start of the year, Solana was the poster child for rapid growth, with its price soaring as it rode the crypto bull market. But when broader market fears took hold, investors rushed to the exits.

Author

Adam Atlantic
February 28, 2025 • Estimated Reading Time: 4 minutes

Solana started 2025 on the highest of high notes, riding the wave of bullish crypto sentiment right up to its all-time highs.

And, on January 19, Solana hit a price of $293.31. From its all-time lows of 50 cents in May 2020, that’s a 58,500% rise trough to peak.

Yet, as of this week, Solana now finds its token price languishing 51% down from that high just over a month ago.

The key question now is whether Solana’s recent tumble signals the end of its meteoric rise. Or can it rebound to challenge Ethereum as the number two blockchain, as many have considered it could (including me).

 What Goes Up, Must Come Down?

At the start of the year, Solana was the poster child for rapid growth, with its price soaring as it rode the crypto bull market. But when broader market fears took hold (thanks to rising geopolitical tensions, impending trade and tariff wars, and a massive sell off in tech on the stock market) and the fear & greed index headed deep into fear, investors rushed to the exits.

Added to the mix was/is the craziness of memecoin mania. The Official Trump token launch (and subsequent Melania memecoin) was so wild that the whole network barely managed to stay functional and stay online.

Confirmations were slow trades and transactions would randomly fail as the blockchain buckled under such a surge in demand and activity. Not long after, random nation states started to abuse the FOMO of the memecoin market causing further mayhem, and significant reputational damage to Solana.

 While the network managed to stay online and functional (barely), the incident exposed vulnerabilities that cast doubt on Solana’s readiness for mainstream, more professionally focused applications.

Also, even with a pro-crypto Trump administration, uncertainty continues to loom large over Solana’s future. The U.S. Securities and Exchange Commission (SEC) once labelled SOL as an ‘unregistered security,’ a shadow that still lingers despite recent hints of a softer regulatory stance.

 Combined with the looming FTX bankruptcy token unlock,[1] an event that threatens to flood the market with around $1.5 billion of SOL, the stage is set for further short-term pressure.

Critics argue that these risks, along with concerns over network decentralization (due to its high hardware requirements and relatively concentrated validator set), might impede Solana’s progress as a serious competitor to Ethereum.

That’s the Bad News…What About the Good?

 Even facing recent headwinds in 2025 there are signs of potential recovery.

Solana’s technical evolution continues with upgrades like Firedancer, designed[2] to help it scale further and reduce congestion under peak loads (like the Official Trump debacle).

Developer activity on the network remains high, with a growing DeFi ecosystem that now holds around $7.2 billion in total value locked.[3]

Partnerships with stock market giants like Shopify are helping to reshape Solana’s reputation.[4] These deals signal that Solana is more than just a playground for memecoins; it’s being eyed as a serious player for real-world financial applications.

The final thing that could see a rebound in Solana is the emergence of Solana-backed spot ETFs. This could usher in a wave of institutional capital, providing much needed additional legitimacy.

While Solana’s 2025 slump is undeniably harsh, it may well be a temporary setback rather than a death sentence.

The coming months will reveal whether the network can transform its vulnerabilities into strengths, shedding its ‘blockchain of memecoins’ identity and emerge as a formidable, trusted blockchain.

I think it can, and I think it still has the chops over time to challenge Ethereum.

Trust in crypto,
Adam Atlantic