Solana’s network activity collapsed in the second half of 2025—and the price followed.
After peaking at more than 30 million active traders in late 2024, Solana’s monthly trader count has fallen to under one million this year, a decline of roughly 97%. The drop has reignited a familiar question in crypto circles: was Solana’s explosive growth real demand, or just cycle-driven excess?
The slowdown coincided with a broader market pullback, as Bitcoin fell more than 30% during the same period. But Solana’s downturn has been sharper and more complex than a simple risk-off move.
Memecoins: Growth Engine or Structural Weakness?
Solana was one of the standout success stories of this cycle. From the depths of the 2022 bear market, SOL rallied from single digits to nearly $300—more than a 35x move. Network stability improved, outages became rare, and developer activity surged.
But much of that activity was fueled by memecoins.
Throughout 2024 and early 2025, speculative trading drove fees, volume, and user growth on Solana. When the market turned, memecoins were among the first sectors to collapse. As that activity dried up, so did network usage—and SOL’s price followed, sliding from near $300 to the $120 area, a drawdown of roughly 58%.
Supporters argue this was inevitable—and even useful. The memecoin wave stress-tested the network, proving it could handle massive throughput without breaking. In that view, speculative traders were temporary passengers, meant to be replaced by more durable use cases like payments, equities, and stablecoin-based applications.
Still, the near-term risk of relying on speculative demand became obvious. When memecoins left, they took a large share of Solana’s activity with them.
Institutional Interest Isn’t Enough—Yet
Solana has made inroads with institutional players, particularly around stablecoin settlement and payments. Those relationships add credibility and hint at longer-term relevance.
But the transition from speculative volume to utility-driven usage takes time. For now, network activity has not yet rebounded at scale, raising questions about how quickly Solana can replace gambling-driven traffic with more sustainable demand.
The Ethereum Comparison Grows Sharper
The contrast with Ethereum has widened this year.
Ethereum continues to dominate institutional adoption and has generated roughly three times more annual revenue than Solana in 2025. While Solana posted strong revenue figures in 2024, this year’s totals suggest a steep decline—highlighting how sensitive its economics were to speculative activity.
Even Solana’s leadership has acknowledged the challenge. The question facing open, permissionless networks is no longer just whether they can grow fast—but whether they can maintain revenues once the cycle cools.
From an investor perspective, the divergence is clear. SOL has underperformed ETH significantly this year, reversing last year’s relative strength.
Where the Debate Now Stands
Opinions remain split on what comes next.
Some analysts expect continued downside, arguing that SOL could revisit much lower price levels in the first half of 2026 if activity fails to recover. Others see the current range as a base, pointing to heavy short positioning that could fuel a sharp relief rally if sentiment shifts.
What is clear is that Solana’s dependence on memecoin activity has been exposed. The network proved it can scale—but now it has to prove it can retain users when speculation fades.
Whether Solana’s next chapter is driven by real-world adoption or remains tethered to cyclical hype will determine if this downturn is a reset—or something more structural.
