According to TradingView data, despite receiving $10 billion in new liquidity and being added to the US Digital Asset Stockpile, Solana has dropped by almost 29% since the beginning of 2025.
The decline occurs even though Solana (SOL), Cardano's ADA, and XRP (XRP) are three altcoins that are part of US President Donald Trump's Digital Asset Stockpile.
Furthermore, according to crypto intelligence portal Lookonchain, since January 1, 2025, Solana has seen more than $9.5 billion worth of newly issued USDC stablecoins, but has unable to reverse this downward trend.
Instead of increasing the price of SOL, some observers argue that the newly created liquidity has shifted into memecoins.
Since the introduction of Trump's Official Trump (TRUMP) token, SOL has decreased 49%, from $261 on January 18 to $121 on March 10.
Dan Hughes, inventor of the decentralized finance platform Radix, told Cointelegraph that "the majority of the inbound liquidity was outflow from other crypto assets, people selling their crypto portfolio to buy TRUMP in extreme FOMO [fear of missing out]" during the introduction of the Trump currency.
The decline in Solana's price coincides with a broader market slump that has seen the global capitalization of all cryptocurrencies drop by around 17% since the start of 2025.
Investors looking for safer assets after the recent wave of memecoin frauds may also be somewhat to blame for Solana's downward trajectory.
In February, Solana had withdrawals totaling more over $485 million, with investor capital primarily moving to Ethereum, Arbitrum, and the BNB Chain.
According to a Binance Research research provided with Cointelegraph, the capital flight coincided with a broader flight to "safety" among participants in the cryptocurrency market.
According to the survey, "Bitcoin dominance increased 1% in the last month to 59.6%, indicating a broader flight towards safety in crypto markets."
It also stated that CZ's tweets about his dog, Broccoli, contributed to some of the wealth flowing into BNB Chain memecoins.
Investor enthusiasm has also been tempered by disappointment with Solana-based memecoin launches, especially with the introduction of the Libra cryptocurrency, which was supported by Argentine President Javier Milei.
According to reports, the project's insiders stole more than $107 million in liquidity in a rug pull, which caused the price to drop 94% in a matter of hours and wipe away $4 billion in investor capital.