The Solana meme coin ecosystem is attractive but is also filled with risks. Many investors plan to trade short-term. Still, rapid price fluctuations have forced them to become 'diamond hands' against their will.
Can they recover their losses? The following reasons show why this is difficult.
Why Solana meme coin investors have small chances of breaking even
CoinGecko reports that the total market value of Solana meme coins is approximately $6.45 billion, with a daily trading volume of over $1.7 billion.
Still, the seven leading meme coins — TRUMP, BONK, PENGU, WIF, FARTCOIN, and PIPPIN — account for about 70% of the total market value. Their combined daily volume constitutes 75% of the sector's liquidity.
This concentration of liquidity causes most remaining meme tokens to get stuck with low trading volume. Their ability to rise is limited.
A report from Stalkchain shows that large ecosystem tokens like PUMP, MELANIA, PENGU, SOL, and TRUMP all have release plans in December. These dilution events cause high market value tokens to fall and drag down the entire sector.
The situation worsens as fraud spreads. Thesis.io analyzed 109 recently launched Solana tokens last week. 68.8% were quickly scammed, and only 18.3% showed 'potential'. Even in this potential group, fraud affected 39.1% of individuals within seven days.
Dune data shows that over 62% of Solana meme coin owners are considered 'diamond hands', meaning they have bought tokens and never sold any of them.
Whether they became owners by accident or due to long-term conviction, their chances of breaking even are diminished by the reasons mentioned above.
Is there any hope
A small positive signal exists. The meme coin market has shown early signs of recovery, although the momentum remains weak.
The most optimistic scenario is that new capital flows into the entire ecosystem. This could lift both large meme coins and smaller tokens with low market value.
If no new funds come in, capital may shift from high market value tokens to small tokens. This rotation could provide underwater owners an opportunity to get out.
"PUMP, TRUMP, BONK, WIF, PENGU, FARTCOIN, and USELESS hold most of the memecoin liquidity on Solana. So when money moves out of them, it has to go somewhere, and that’s when small tokens and new tokens start to rise," predicts Stalkchain in a message.
Nevertheless, the hunt for opportunities in meme coins remains a high-risk gamble. A proper portfolio allocation is necessary so that the entire portfolio does not become overly dependent on these tokens.
