What’s Behind The Volatility In Solana’s Price?


The price of the cryptocurrency Solana (SOL) is going through a phase of significant volatility, moving from levels of around $180 on January 13 to over $290 on January 19, before falling to around $190 now. Notably, SOL is down 20% in a week, amid a broader sell-off in cryptocurrencies after the president Trump signed tariffs on Mexico, Canada, and China.

The large move this month can be attributed to a meme coin launched by President Donald Trump on Solana’s blockchain.  The meme coin — Official Trump (TRUMP) — is now the largest meme coin on the Solana network, with a market capitalization of $10 billion. In fact, the recent rally has made SOL the world’s fifth-largest cryptocurrency, with a market cap of over $100 billion.

Cryptocurrencies have rallied since Trump won the U.S. presidential elections, as hopes that the new administration will take a friendly approach toward digital currencies, sparked unprecedented interest in them. After all, in one of his rallies, Trump said he would make the U.S. the “crypto capital” of the world. This has led to the most popular cryptocurrency, Bitcoin, crossing the $100,000 mark for the first time ever — more than doubling from the level of $44,000 at the beginning of 2024. Ripple’s coin XRP has seen one of the strongest rallies among the larger coins. Our take on What’s The Next Trigger For XRP Price? has more details.

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Now, the $TRUMP coin gained over 700% in two days after its launch on January 17 but has corrected meaningfully since then. First Lady Melania Trump also launched the $MELANIA meme coin on the Solana platform, and it now has a market capitalization of around $700 million. It should be noted that the Trump meme coin was created to demonstrate support for and connection with the values and symbolism associated with “$TRUMP” and related artwork. The official webpage of the meme coin has a disclaimer stating that the meme coin’s purpose is not to serve as any form of investment product or security. $TRUMP is non-political and has no affiliation with political campaigns, offices, or government organizations.

The token distribution for $TRUMP breaks down as follows: of the initial 200 million coins (which will expand to one billion within three years), the public can access 10%, another 10% is reserved for liquidity, and the remaining 80% is allocated to content creators and CIC Digital, which is connected to The Trump Organization.

Now, Solana is a blockchain network that offers swift and cost-effective transaction processing, alongside tools for building decentralized applications. Other than $TRUMP, some of the coins on its platform include Raydium (RAY), Jupiter (JUP), and another meme coin, Bonk (BONK).

Trump was sworned in as the 47th president of the U.S. on Janaury 20, and he has picked a crypto-friendly face – Paul Atkins – to lead the SEC. Furthermore, David Sacks – a venture capital firm co-founder – will be the AI & Crypto Czar. This is being seen as favorable for cryptocurrencies at large.

Overall, SOL has had a great past few months, and this breakout could well be just the beginning of a much larger rally. A key driver of growth for SOL is likely to be the possible launch of its ETF. Bitwise, VanEck, 21Shares, and Canary are some of the asset managers awaiting ETF approval for SOL. While a Solana ETF may attract less investment than Bitcoin and Ethereum ETFs, its approval would still benefit SOL by enhancing its market credibility, enabling institutional investment, and providing easier access for retail investors. Furthermore, the recent $TRUMP coin on Solana’s network and a potential ETF approval may increase its market adoption, with more developers building on the platform.

Although SOL has seen a 20% fall in a week, looking at a slightly longer timeframe, the increase in SOL over the recent years has been far from consistent. The returns for the coin were, 11,171% in 2021, -94% in 2022, 976% in 2023, and 78% in 2024, considerably more volatile than the S&P 500.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Returns Feb 2025
MTD [1]
Since start
of 2024 [1]
2017-25
Total [2]
 SOL Return -7% 118% 15231%
 S&P 500 Return 0% 27% 170%
 Trefis Reinforced Value Portfolio 0% 24% 801%

[1] Returns as of 2/2/2025
[2] Cumulative total returns since the end of 2016; Returns for SOL are since the end of 2020

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