In brief
- Solana meme coins as an asset class have dropped more than 8% on the day.
- Expert say that investors are looking to purchase “quality-focused” assets, such as Ethereum and other altcoins.
- ETH has posted impressive gains this month, up 47.5%, as institutional interest in the asset spikes.
Solana meme coins are one of the worst-performing crypto asset classes of the day, according to CoinGecko, with the category as a whole slumping by 8.5%. It comes as experts say that investors are rotating funds into “quality-focused” assets such as Ethereum and other leading altcoins.
Major Solana meme coins, such as absurdist meme Chill House, the lowbrow token Fartcoin, and gaming-inspired meme MLG, have all dropped by double digits on the day. The network’s second-largest meme coin BONK has fallen 6.5%, despite the announcement that a publicly traded company intends to acquire $115 million worth of the token by the end of the year.
It’s worth noting that the total meme coin sector is down 4.1% on the day and the entire crypto market is trading flat, per CoinGecko, but Solana memes have underperformed the wider meme coin market. Meanwhile, it’s been a great month for Ethereum, up 4.7% on the day per CoinGecko data.
“The ETH ecosystem, DeFi, and higher-beta L1s have generally held up better than meme-coins. SOL continues to lag, with competitors questioning its narrative,” Max Shannon, senior associate at crypto index provider Bitwise, told Decrypt.
Ethereum attracts institutional interest
It follows a spike in institutional interest in ETH, as $10.87 billion in total has flowed into Ethereum ETFs while public treasury companies have acquired more than $14 billion. Ethereum ETFs and strategic reserves now account for almost 8% of ETH’s total supply.
“Our institutional clients are becoming increasingly fundamental-discerning and quality-focused,” Shannon explained. “The emerging narrative is ETH as the backbone for institutional capital moving on-chain: Ethereum combines a long operating history, zero downtime, and leading decentralization and liquidity.”
As such, the best performing assets on the day are projects like the purpose-built real-world asset network Provenance Blockchain, which has jumped 10.2%. Over the week, other “quality-focused” projects have seen the largest gains, like the stablecoin issuer Ethena, which spiked 40.5 in the past seven days%.
“Solana meme coins are down and marking one of the sharpest sector declines, while higher-liquidity altcoins are drawing flows,” Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet, told Decrypt.
Elkaleh added that the pattern “points to a clear capital shift: traders are trimming exposure to the highest-beta, thin-liquidity bets and reallocating into deeper markets with stronger narratives and institutional participation, especially ahead of macro events like the U.S. CPI print.”
That said, volume in the Solana trenches saw a steady increase over the past seven days, according to Dune data, spiking to $235 million in daily volume across token launchpads on Monday. The increase has occurred amid a battle for market share between token launchpads, with Pump.fun reclaiming its crown on Wednesday.
Still, per CoinGecko, Solana is down just 0.5% on the day as the third-worst-performing asset in the top 10 cryptocurrencies—behind XRP, which set a new all-time high last month, and Dogecoin.
“Although memecoins remain the most actively traded assets on Solana DEXs, their share has recently dropped to 44% from a mid-July peak of 73%,” Illia Otychenko, Lead Analyst at crypto exchange CEX.IO, told Decrypt. “This indicates waning interest even within the Solana ecosystem, which could be the catalyst behind their contraction.”
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