The cryptocurrency market is witnessing a notable shift as Solana emerges as a key player amid increasing regulatory optimism and surging ecosystem activity. Recent developments, including a dramatic rise in fees generated by Solana-based protocols and growing confidence in the approval of a Solana exchange-traded fund (ETF) by 2025, are evidence of the blockchain’s rising prominence.
Solana Ecosystem Shines as Meme Coin Mania Spurs Record Activity
The Solana blockchain is witnessing an unprecedented surge in fees and revenue, reflecting a dramatic uptick in activity across its ecosystem. The frenzy comes amid a resurgence of meme coin speculation, driving significant traction to Solana-based protocols and pushing its native token, SOL, closer to its all-time high.
Decentralized finance (DeFi) commentator Patrick Scott highlighted the stellar performance of Solana protocols in a Nov. 18 post on X, citing data from DefiLlama. Notably, five out of the top ten blockchain protocols by fees in the past 24 hours were based on Solana.
Prominent among these protocols was Raydium, an automatic market maker that recorded a staggering $11.31 million in fees on Nov. 17—a single-day record. Similarly, the liquid staking protocol Jito logged its third-highest day of fees at $9.87 million.
Meanwhile, pump.fun, a meme coin launchpad, reported $1.65 million in fees—its seventh-highest daily earnings. Photon, a Solana-based Telegram trading bot catering to meme coin enthusiasts, also stood out, generating $2.36 million in fees, marking its fifth-highest day on record.
The record-breaking performance of these protocols comes amid a renewed wave of meme coin speculation that has gripped the cryptocurrency community. One of the standout stories involves Peanut (PNUT), a meme coin themed around a squirrel, which skyrocketed over 2,700% in the past two weeks. The token reached a peak valuation of $2.4 billion on Nov. 14, bolstered by multiple endorsements from Elon Musk on X.
Adding to the excitement, Dogwifhat (WIF), the largest Solana meme coin, was listed on Coinbase on Nov. 15. The listing catapulted WIF to a six-month high of $4.19 before retracing slightly. The listing aligns with growing institutional interest in memecoins, as evidenced by the broader market’s response.
The activity surrounding Solana-based applications is mirrored in the price action of SOL, its native cryptocurrency. On Nov. 17, SOL surged to $242, marking its highest level since November 2021. Currently trading at $234, SOL is a mere 8.5% shy of reclaiming its all-time high of $259, achieved two years ago.
Interestingly, Solana’s market capitalization now stands at $112 billion—44% higher than its $77 billion valuation during its previous price peak. This growth is attributed to Solana’s inflationary issuance schedule, which rewards stakers with newly minted tokens. According to SolanaCompass, the blockchain’s current inflation rate is 4.9%, decreasing at an annual rate of 15%.
The resurgence in Solana’s ecosystem activity is emblematic of broader trends in the cryptocurrency market, particularly the meme coin sector. The recent rise of PNUT and WIF echoes the speculative fervor seen during earlier memecoin booms, suggesting that the market remains fertile ground for meme-driven narratives.
Additionally, the listing of WIF on Coinbase and its association with the US government’s new Department of Government Efficiency has further legitimized memecoins in the eyes of retail investors. Intriguingly, the department’s name shares the same abbreviation as Dogecoin (DOGE), which has also experienced a 140% rally in the past two weeks.
Challenges Ahead for Solana
Despite its stellar performance, Solana faces challenges, including competition from other blockchain ecosystems and the inherent volatility of the cryptocurrency market. Additionally, its inflationary tokenomics may raise concerns among investors, even as the network reduces its inflation rate annually.
Nevertheless, Solana’s impressive protocol activity and growing market capitalization signal its resilience and ability to capture market narratives effectively. As meme coin mania reignites, Solana appears poised to capitalize on the speculative fervor.
Solana ETF Approval Likely as Trump’s Presidency Signals Shift in US Crypto Regulation
Meanwhile, the likelihood of a Solana ETF listing in the United States by the end of 2025 has risen dramatically, according to Matthew Sigel, VanEck’s head of digital asset research. Speaking on Nov. 15, Sigel cited the impact of Donald Trump’s recent presidential election victory and anticipated regulatory shifts under his administration as key drivers behind the increased odds of approval.
In an interview with the Financial Times, Sigel expressed confidence that the US Securities and Exchange Commission (SEC) would adopt a more favorable stance toward cryptocurrency products in the coming years.
“We would expect the SEC to approve more crypto products than they have in the past four years,” Sigel stated. “I think the odds are overwhelmingly high that there will be a Solana ETF trading by the end of next year.”
This optimism reflects broader expectations across the industry that Trump’s presidency will usher in a more libertarian approach to financial regulation, potentially breaking a years-long impasse on crypto ETF approvals.
Under President Joe Biden, the SEC, led by Chair Gary Gensler, pursued an aggressive regulatory agenda, initiating more than 100 enforcement actions against cryptocurrency companies. This stance created significant hurdles for the crypto industry, including delays in approving innovative financial products like ETFs.
Trump’s presidency, however, is expected to mark a significant departure from this approach. Bloomberg Intelligence ETF analyst Eric Balchunas suggested that many of the recent ETF filings were effectively “call options on a Trump victory,” signaling anticipation of a more favorable regulatory environment.
Although Trump has not announced a replacement for Gensler, speculation has mounted around key figures who could shape the future of US crypto regulation. Among them is Summer Mersinger, a Republican commissioner at the Commodity Futures Trading Commission (CFTC), who has advocated for a more accommodating stance toward crypto markets.
The CFTC, second only to the SEC in its influence over US cryptocurrency markets, is expected to play an increasingly pivotal role in shaping regulatory policies under Trump’s administration.
The potential approval of a Solana ETF aligns with a broader push for cryptocurrency ETFs in the United States. Asset managers have flooded the SEC with filings for ETFs tied to altcoins like Solana, XRP, and Litecoin, as well as crypto index ETFs holding diversified baskets of tokens.
Grayscale’s recent request to list the first ETF comprising multiple cryptocurrencies suggests a growing demand for such products. The SEC’s review of these proposals could pave the way for a wave of approvals, particularly under a Trump administration that is expected to prioritize financial innovation.
Industry Optimism and Market Impact
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, described Trump’s election victory as a ”massive win for crypto,” calling it a ”complete game-changer.” Hougan highlighted the challenges faced by the industry under the previous administration, including regulatory uncertainty and limited access to banking services.
“For the past four years, crypto has been operating with one arm, maybe two arms, tied behind its back,” Hougan said. “Imagine what happens when the headwinds abate.”
This optimism is particularly pronounced for Solana, a blockchain that has seen substantial growth and adoption. A Solana ETF would likely attract institutional investors, further legitimizing the blockchain and driving its native token, SOL, toward new heights.
The anticipation of a Solana ETF approval comes as the blockchain continues to make headlines for its robust ecosystem activity and price performance. SOL recently traded at $239.82, approaching its all-time high of $259. A successful ETF launch could serve as a catalyst for further price appreciation and solidify Solana’s position as a leading player in the cryptocurrency market.
The potential approval of a Solana ETF represents more than just a win for the blockchain; it signals a turning point for the cryptocurrency industry in the United States. As regulatory headwinds subside under Trump’s administration, the market could see a surge in innovation and adoption, driven by increased institutional participation. For Solana, the path to an ETF could open the door to unprecedented growth and further cement its role in shaping the future of decentralized finance.
This article was originally Posted on Coinpaper.com
