Solana (SOL) is crashing.
It got cut nearly in half over the last month, dropping 45%:
Source: Coinmarketcap
Does that mean you should sell? Or is Solana a screaming buy?
As I’ll show you, I think this pullback is a buy-the-dip opportunity.
Why did Solana crash?
Two reasons:
#1 The “big” $2 billion Solana unlock is scheduled for March 1.
A week from now, Solana will release 11.2 million SOL tokens into the system worth around $2 billion.
This will create some inflation. But it’s really no cause for panic. 489 million SOL tokens are already in circulation. So that additional unlock will add just 2% more.
Also, Solana doesn’t plan any other big unlocks until January 2028.
#2 The meme coin bubble popped.
Solana is the most popular blockchain to launch meme coins. There have been a number of pump-and-dump scandals recently involving Solana meme coins recently.
The most popular one was Argentina’s President Milei’s Libra coin. The market cap of $LIBRA reached $4.6 billion a few hours after the launch, then fell to only $162 million by the next day. A 96% drop.
Other popular meme coins like Trump coin, Melania coin, and Dave Portnoy’s GREED coin shed 80–90% of their value too.
In other words, the meme coin bubble has finally popped.
Some investors are afraid this means demand for Solana’s blockchain will evaporate. They couldn’t be more wrong.
Investors who think Solana is just a platform to launch meme coins are missing the big opportunity.
Thousands of blockchain apps are being built on the Solana infrastructure. Solana is the foundation of an entire digital economy.
Think of how the App Store works on your iPhone. You can download millions of apps for just about everything. The only limit to what “apps” developers can build on Solana is their imaginations.
Today, there are over 500 apps running on Solana’s blockchain — and it’s the home to many of the world’s top DeFi projects like Raydium (RAY), Ondo Finance (ONDO), Jito (JTO), and others.
And each app pays millions of tiny fees to Solana for each transaction. Solana made over $100 million in fees in January.
Developers love Solana because it’s the fastest of all the major blockchains.
Solana currently processes 65,000 transactions per second — just as fast as Visa. That’s 10,000X faster than bitcoin and 2,000X better than Ethereum.
Solana is also far cheaper to use than most other blockchains. It costs about three bucks to do a transaction on bitcoin. And between $8 and $40 on Ethereum. A transaction on Solana will set you back $0.00025 — a fraction of a penny.
Solana ETFs are coming in 2025.
Ever heard of the “infinite bid”?
When tens of millions of Americans get paid every other week, they buy stocks on autopilot through their retirement accounts.
This creates continuous demand for stocks, which puts a floor under prices.
Crypto lacked this infinite bid until ETFs arrived.
When bitcoin ETFs got the green light to start trading at the beginning of 2024, the floodgates opened. Billions of dollars of Wall Street’s money started pouring into crypto for the first time ever. Just two months after Bitcoin ETFs launched, $60 billion worth of investor money poured into these funds. It’s the main reason why BTC corrections during this bull cycle are so shallow.
So far, five institutions applied for a Solana ETF: VanEck, 21Shares, Canary, Bitwise, and Grayscale which is converting its existing Grayscale Solana Trust (GSOL):
Source: Bloomberg
We already have Ethereum and bitcoin ETFs. Solana ETFs are the logical next step.
More important, Solana is 17 times smaller than bitcoin. That means it takes a lot less money to move its price.
Even if Solana attracts 10% of the inflows bitcoin got, logic says that when billions of dollars start flowing into SOL, its price will rise exponentially.
Since bottoming in 2022, Solana has bounced back from every 40% drop.
It happened four times. And after each crash, Solana price went on to make new highs.
It’s also important to remember Solana price is up 2,100% since bottoming in December 2022.
I first recommended SOL to my Venture subscribers in 2023. And while I no longer think it’s a screaming buy as it was then, I still think you’re getting a bargain at these prices.
Bottom line: Buy Solana while it’s cheap!
For more insights, subscribe to my investing letter The Jolt⚡.
I publish fresh research on stocks and crypto every Monday and Friday.
Also, I just released a report on 3 early-stage cryptos to buy in 2025.
— Stephen McBride, Chief Analyst at RiskHedge
Is Solana a screaming buy? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.