The Solana meme coin ecosystem is attractive, but it is also filled with risks. Many investors plan short-term trades. However, due to drastic price fluctuations, they have inadvertently become 'diamond hands'.
Will they be able to recover their losses? It becomes evident that it is difficult due to the reasons below.
Reasons why Solana meme coin investors find it difficult to recover their capital
According to CoinGecko data, the total market capitalization of Solana meme coins is approximately $6.45 billion, with daily trading volume exceeding $1.7 billion.
However, the top 7 meme coins — TRUMP, BONK, PENGU, WIF, FARTCOIN, PIPPIN — account for about 70% of the total market capitalization. Their combined daily trading volume represents 75% of the liquidity in that sector.
Due to this phenomenon of concentrated liquidity, most remaining meme tokens are stuck with low trading volumes. Therefore, the potential for recovery is also limited.
According to a report by Stalkchain, major ecosystem tokens such as PUMP, MELANIA, PENGU, SOL, and TRUMP have large unlock schedules in December. This increase in circulating supply causes large tokens to decline, negatively impacting the entire sector.
The situation is worsening as scams are rampant. Thesis.io analyzed 109 new Solana tokens issued last week. Of these, 68.8% were quickly found to be scams, and only 18.3% were deemed to have 'potential'. Even among the potential group, 39.1% were scammed within 7 days.
According to Dune data, over 62% of Solana meme coin holders fall under 'diamond hands'. These are investors who bought the tokens and have never sold them.
Even if investors have become holders by chance or long-term conviction, the possibility of recovering the principal becomes even slimmer due to the reasons explained above.
Is there any hope left?
There is one positive sign. The meme coin market has shown initial signs of bottoming, but momentum remains weak.
The most optimistic scenario is that new capital flows into the entire ecosystem. In this case, both large meme coins and small tokens can show bullish trends.
If there is no new capital inflow, funds may move from large to small meme coins. Through this rotation, some trapped investors may get an opportunity to escape.
"PUMP, TRUMP, BONK, WIF, PENGU, FARTCOIN, and USELESS hold most of the liquidity of meme coins on Solana. If funds flow out of these, that money will go somewhere, and at that time, small and new tokens will begin to surge." – Predicted by Stalkchain.
However, seeking opportunities in meme coins still carries high investment risks. Proper asset allocation is needed to ensure that the entire portfolio does not overly rely on these tokens.
