How Solana hijacked the Altcoin Season
They outplayed the market, but this is now pushing users back to Bitcoin.
Solana’s team are masters at playing the market and they proved it by capturing the meme sector in this cycle.
They effectively hijacked the altcoin season, moved it to Solana, and gave nothing back.
Here’s how they did it and why this impacts everything else, including your bag. Scroll down to find out the biggest losers and winners in all of this.
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Solana has become the chain with the highest trading volume in crypto and over 90% of that volume is due to meme tokens.
In mid-January when the TRUMP meme token was launched, Solana’s chain processed more volume than all other blockchains combined! Solana has effectively hijacked the Altcoin Season. How exactly did they achieve this?
They created the applications that gave users exactly what they wanted to express their greed. This is how pump dot fun was born. This little application may seem harmless at first sight, but it is the silver-lining of everything Solana has achieved.
Pump.fun allows anyone to create a meme token with a few clicks. To do so, you need SOL tokens. If your meme token is successful and graduates to Raydium, like RAT Escape, a liquidity pool is created looking just like this: RAT/SOL.
This liquidity pool locks FOREVER Solana tokens so users can trade that meme token. The bigger the market cap of said meme token gets, the more SOL tokens are locked forever in that pool. See where this is going?
Now multiply that with over 30 million Solana meme tokens. Even if only around 1% of them graduate to Raydium, that’s still 300,000 meme tokens and liquidity pools locking millions of Solana tokens! See the chart below.
Only the TRUMP token reached 70 billion market cap in a few days. That’s a huge sink that effectively burns Solana tokens. Remember, Solana has an infinite supply. They print more SOL tokens every day, until infinity.
To counter balance this inflation, the Solana team has invented the best tool ever created: pump.fun. It burns Solana in the millions. This allows the Solana team to print SOL without issues.
You’d expect Solana’s price to explode thanks to this. But instead, it barely reached $300 during the TRUMP mania. That’s because all this demand is simply absorbed by printing new SOL tokens to be sold into unsuspecting users gambling on meme tokens.
Solana effectively stole the altcoin season and gave nothing back
The TRUMP token is the best example of this. It was launched on Solana and sucked all market liquidity within 24h. Every altcoin crashed as money moved to TRUMP and the Solana chain.
While users were rushing to buy this latest pump and dump, the real winners were the team at Solana.
This also proved the market cannot sustain more than one major token pumping at any one time. There’s simply not enough liquidity to have a proper altcoin season, and whatever liquidity is there, it’s sitting on Solana gambling on memes.
Together with millions of new tokens launched every month on Solana, this effectively has killed the altcoin game. We are facing a massive dilution in the altcoin space. We went from 20,000 altcoins to 30 million in the span of a few years. You cannot pump millions of tokens!
Who’s the biggest loser in all of this?
Ethereum.
Plain and simple. Ethereum lost and any token on the Ethereum native chain is at a huge disadvantage now. Not just in terms of fees, but also user retention, attention, and interest.
No wonder, Ethereum failed to make an all-time high in this cycle. Big red flag right there. This is also a red flag for any other altcoins hoping to pump. If you’re not a meme token on the Solana network, you’re already at a huge disadvantage, regardless of how legitimate your use case is.
Unless your token is in the AI business or meme sector, the chances of it pumping are slim. If you’re not riding a trending narrative, waiting for the altcoin season is like waiting for rain in the Sahara Desert.
However, what Solana has unleashed with its memes generator has created a major market imbalance. Crime is rewarded now instead of legitimate use cases. This is not sustainable and the current incentives have been turned on their head.
Eventually, the market will restore balance.
Who’s the biggest winner in all of this?
Bitcoin.
You can’t create millions of tokens and expect anything but a crash to zero eventually. As users wake up that the’ve been played, they will seek safety. A reliable place for their money.
There’s only one answer to that.
Bitcoin.
As money begins to leave Solana and its meme casino in the future, most of that liquidity will go back to Bitcoin. Users will realize that the narrative around the altcoin season was a trap and was already stolen by Solana anyway.
The Bitcoin price action already shows it’s becoming more and more disconnected from the altcoin market. Bitcoin made a new record price at 109k and seemed unaffected by the meme mania. This disconnect will only increase with time.
Solana will crash hard
Long term, what Solana is doing is akin to sawing off the branch it’s sitting on. It’s printing more SOL tokens every day, and to counter that inflation, it is printing millions of meme tokens. This will end with SOL’s price experiencing a massive crash later on.
The SOL crash will come in the next bear market as soon as retail stops visiting the Solana meme casino. Without this demand, Solana is destined to crash. This is why holding Solana tokens long term is a pretty bad idea.
However, greed will never end. The meme casino will remain on Solana and return with each new bull cycle. If you plan to get involved, then play the cycles right and don’t be left holding the bag. This is why I invite you to join our Patrons Pro group. This roles is for life once in. You can also join if you own over 1 million RAT which is at a great price nowadays.
Right now, there is no real competitor to Solana in the meme sector, except the market itself which may correct this imbalance with a proper bear market later. Bear markets are a necessary cleansing of such degenerate behaviors and offer an excellent period to buy in cheap. Make sure you have cash when it comes.
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All info is provided for educational purposes only and is not financial advice.