Solana Memecoins Continue Freefall of Over 70% After December Boom

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Brian Yue

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Brian Yue

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January 8, 2024 11:21 EST

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Meme coins on the Solana blockchain have continued their rapid drop after a surge in December.

The Solana blockchain previously drew attention in December after bonk tokens experienced a rally of over 1000%.

SOL, Solana’s native token, even exceeded the market capitalization of other major cryptocurrencies like BNB, albeit briefly.

However, the hype seems to have died down in the past week. Bonk tokens have plummeted by over 70% from its December peak, and is currently trading at just $0.00001069 at time of writing, according to CoinMarketCap. The development is surprising considering Bonk’s resurgence led to the memecoin being listed on popular exchanges such as Binance and Coinbase.

Meanwhile, Dogwifhat, a Solana memecoin known for featuring a dog wearing a beanie, has dropped by almost 80%. The memecoin previously provided early holders with a return of over 10,000% during the December boom, but is now trading at $0.09279 at time of writing, according to CoinMarketCap.

Dogwifhat drew headlines in mid-December when it was reported that a trader turned $226,000 into over $1.6 million after buying over 19 million Dogwifhat tokens between December 13 and 15.

The trader bought the tokens at an average price of $0.01137, according to blockchain analytics firm Lookonchain. Three weeks ago, the tokens’ total value hovered at around $1.69 million, meaning the trader made about $1.47 million in profit within five days.

Solana Tokens Continue to Fall

Lesser-known tokens on Solana are also experiencing rapid drops – cat-themed tokens Popcat and chipi have dropped by over 90% from their peak values.

The sharp downward correction will come as bad news for holders of Solana memecoins, and a relative shock considering the success they experienced in December.

Solana’s rapid growth starting in mid-September was fuelled largely by its reputation for fast and inexpensive transactions, alongside the plethora of new meme coins minted on the blockchain. Memecoins on Solana continued rising through the altcoin rallies that occurred in October, and sustained their upward run until mid-December.

On-chain traders also started paying a lot more attention to Solana, with the blockchain’s trading volumes and network fees surpassing even those of Ethereum on a seven-day rolling basis.

The increase in locked value within Solana applications rose from $400 million in November to $1.3 billion, nearing levels not seen since July 2022. However, inflated valuations prompted profit-taking, resulting in a decline by late December. This led to new token launches losing a significant amount of momentum, with investors shifting their capital towards tokens on other blockchains.