Published: March 6th, 2024
Solana-based decentralized exchanges (DEXs) saw a surge in trading volumes last week (wc 26 February, 2024), setting a new all-time high and confirming the Ethereum competitor’s ranking as one of the main beneficiaries of the current, and steadily escalating, crypto bull run.
Figures from Defi Llama show that between 24th February and 2nd March, more than USD 11.20 billion in digital assets changed hands on Solana DEXs, up 153 per cent over the preceding week. It exceeds the previous ATH for Solana DEXs reached in mid-December 2023, when USD 9.88 billion was traded in a single week.
The biggest beneficiary of the Solana trading frenzy has been Orca, which generated north of USD 4.5 billion in trading volume over the past seven days. Raydium came a close second with USD 3.51 billion in trading volume over the same period. Both DEXs have watched their trading levels more than double in the last two weeks.
Crypto prices have surged across the board over the same period, and Solana-based tokens have benefited hugely amid the furor. By the end of last week (wc 26 Feb), SOL shot up to a 22-month high after posting a 30 per cent gain in one week. Solana-based meme coins have also benefitted, with Dogwifhat and BONK amongst the biggest winners.
On Friday 1st March, daily trading volumes on Solana DEXs exceeded USD 2 billion, only the second time this has happened. The previous two-billion daily trading milestone happened on 21st December 2023, when Solana DEXs volumes hit USD 2.6 billion on the back of a meme-coin fueled run.
In November of last year, a previous Solana surge came to a halt after an impressive climb during the first week of the month. Data from CoinGecko tracked the (then) seventh biggest coin by market cap in decline by nearly five per cent between Monday 13th November and Tuesday 14th November, when it traded hands at USD 55.38.
Just one week prior, the Ethereum upstart saw a surge in price that set it apart from every other coin and token over the previous 30 days. For the first time since May 2022, SOL's price shot past USD 50. Analysts said that the spike was probably due to a squeeze created by short sellers exiting their positions and institutions showing more interest in Bitcoin alternatives.
Even after a brief dip, Solana stayed up by more than 40 per cent. Top-ranked Bitcoin was down one per cent during the same period and traded at USD 36,829. Number two digital asset Ethereum (ETH) was up by close to two per cent and traded for USD 2,095.
Several of Solana’s altcoin peers also experienced gains. Leading the charge was FIL, the native token of decentralized storage provider Filecoin. FIL was up nearly ten per cent and traded hands at USD 5.32.
Ethereum received a big boost in late October 2023 and pushed past USD 2,000 for the first time in months following news that BlackRock had made an application to list an Ethereum Trust under its iShares brand.
Solana had been tarnished by its association with the FTX scandal and saw price dips each time it was mentioned at FTX founder Sam Bankman-Fried's trial. Despite the reputational damage, its price shot up by 20 per cent over the seven days leading up to 31st October.
Other altcoins saw gains as well. XRP’s price was up nearly five per cent on 1st November, changing hands for USD 0.55.
Avalanche, sitting at 20th on the top digital asset by market cap list, was up over three per cent. Like Solana it had posted steady gains over the previous seven days, putting it up by 17 per cent.
Meme coin Pepe was also on the rise. The newest addition to the top altcoin performers list was fetching USD 0.00000120 on 31st October, representing a nearly five per cent rise in 24 hours. For the previous seven days, it topped the high-performers list with a price jump exceeding 60 per cent.
Most cryptocurrencies experienced price gains over the seven days up to 31st October as traders and investors opened new positions on optimism that SEC approval for a Bitcoin spot exchange-traded fund (ETF) was imminent.
Some of the biggest names on Wall Street had submitted applications to the financial watchdog for a BTC ETF product. After dragging its feet and losing a series of legal challenges, analysts started to believe that SEC regulatory approval was a foregone conclusion and the first spot crypto ETF would soon be launched.
At the beginning of November 2023, Data from CoinGecko tracked a jump of over seven per cent for SOL from Monday 30th October to Tuesday 31st, trading at USD 34.77.
Solana had been on the defensive when figures from Alameda Research showed plunging prices for SOL, which lost more than half of its value in the aftermath of the FTX liquidity debacle.
Most major coins saw their value drop significantly in the week following the closure of popular exchange FTX. Its collapse cratered confidence in the wider crypto market. Solana was hit particularly hard due to its close ties to FTX and embattled founder Sam Bankman-Fried.
On Tuesday 15th November 2022, the Solana Foundation revealed the extent of its financial links to both, saying that it had roughly USD one million in cash or other assets on the exchange before FTX stopped processing customer withdrawals on 6th November 2022.
Pending the results of FTX’s bankruptcy proceedings those assets were held in legal limbo for an extended period. The Foundation noted, however, that the sum amounted to less than one per cent of its funds.