Solana’s Memecoin Woes Deepen as LIBRA Collapse Rattles Investors

Solana’s SOL token has taken a hit, sliding against both the U.S. dollar and ether (ETH), as yet another memecoin scandal grips the blockchain’s speculative ecosystem.

According to a Monday report from Galaxy Research, the apparent rug pull of LIBRA is the latest in a string of setbacks for Solana’s memecoin market, further shaking investor confidence.

The report noted that sentiment had already started to shift following the launch of TRUMP in January, which caused a liquidity drain across the ecosystem. Now, the LIBRA collapse could inflict even more damage, potentially reducing demand for SOL, as memecoins have been a major driver of the token’s recent gains.

Since LIBRA’s debut, SOL has struggled to maintain momentum, dropping 8.6% in the past 24 hours to $168.73 at publication time.

The controversy has also sparked political turmoil in Argentina, where President Javier Milei, who promoted LIBRA as a tool for small businesses, is now facing impeachment threats. The token initially skyrocketed to a $4.5 billion market cap before crashing by 90%, leaving many investors reeling.

“This is just the latest sordid episode to emerge from Solana’s memecoin frenzy,” wrote Alex Thorn, head of firmwide research at Galaxy. “The sector has been in decline ever since TRUMP’s brief surge to a $75 billion fully diluted valuation (FDV) in January.”

Meanwhile, Kelsier CEO Hayden Davis, the man behind LIBRA, admitted that he and his team were also responsible for the MELANIA token and had strategically sniped their own contracts upon launch.

“This wasn’t a rug pull,” Davis claimed in an interview with crypto investigator Coffeezilla. “It was a poorly executed plan that spiraled out of control, leaving me in charge of $100 million with no easy resolution.”