In 2022, the Terra blockchain and UST stablecoin collapsed, leaving a trail of devastation that only worsened when FTX collapsed later that year. Crypto asset Solana (SOL) took a big hit, falling to alarming lows. By January 2023, SOL had bottomed out in terms of prices. However, in an unforeseen twist, the token made a stunning comeback, rising 1,656% and rising from the ashes of these cataclysmic events.
Solana’s two-year leap: blockchain and cryptoasset that refused to stay afloat
Almost two years ago, Solana (SOL) was trading between $9.99 and $11.16 per coin, ranking as the 18th largest cryptocurrency by market capitalization. On January 2, 2023, it had a market value of $4.1 billion as it began to recover from the collapse of Terra and FTX, which shook the crypto economy to its core. During the same period, the price of Bitcoin (BTC) was below US$17,000 and the overall cryptocurrency market was valued at US$832 billion.
Since then, Solana has seen a surge in prices and a surge in activity on the layer one (L1) blockchain. The token’s recovery in 2023 can be attributed to the vibrant ecosystem and the rise of meme coins. Solana’s scalability and minimal transaction fees have made it a hotspot for meme-based tokens such as BONK, FRONK and POPCAT.
This momentum was fueled by the launch of Pump.fun in January 2024, a decentralized platform allowing users to easily create and trade meme tokens. Solana’s on-chain transfer volume reached a record $318 billion in November 2024. Along with this, the number of active addresses skyrocketed from 12.7 million at the start of 2023 to over 123 million by the end of 2024, driven by meme token activity and platforms like Pump.fun.
As of December 31, 2024, solana (SOL) is valued at $196 per token, reflecting an astounding 1656% increase from the January 2, 2023 price of $11.16. However, its current value remains more than 25% below the all-time high of $263 recorded on November 23, 2024. At the beginning of 2024, SOL was trading at $107.88 per unit. At its current price, Solana has a market capitalization of approximately $94 billion, representing 2.87% of the $3.28 trillion cryptocurrency market.
Solana’s extraordinary recovery highlights the resilience of the blockchain ecosystem in solving problems. Its ability to reinvigorate and attract new users and developers demonstrates the ever-evolving nature of the crypto industry, where innovation and adaptability are essential to staying ahead.
Solana’s future progress will depend on its ability to continue to innovate and scale in a highly competitive environment. Despite the impressive economic recovery, questions remain about how long it will last. Relying on meme coins and platforms like Pump.fun comes with significant risks, as the speculative nature of these assets makes them susceptible to sharp declines.
As history has often shown, the future success of blockchain will depend on maintaining a balance between innovation, stability and community participation to protect its market dominance and maintain investor confidence.