Down 14% in 1 Week, Is Solana Still a Buy?

Key Points

• Solana's price has fallen sharply from a level near its all-time high.

• Investors don't seem excited about the asset right now.

• They probably should be.

• 10 stocks we like better than Solana ›

Solana (CRYPTO: SOL) rocketed to more than $250 in mid-September before plunging to $195 on Sept. 25 in a move that shook even the coin's evangelists. From Sept. 21 to Sept. 27, it fell 14%.

So is there something seriously wrong with this coin, or is it still a buy?

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Image source: Getty Images.

This sharp slip was caused by familiar factors

Let's start by unpacking why Solana experienced such a deep dip in the first place.

One reason was that the Federal Reserve's preferred inflation gauge ticked up in August, nudging investors to reassess their exposure to risk just as the crypto market was running hot. The market's mood shifted fairly quickly, with fear-and-greed gauges slipping back into the fear zone late last week as the odds of further interest rate cuts this year dimmed.

When the odds that it will get cheaper to borrow money grow worse, some market participants tend to respond by dumping riskier assets like Solana. In other words, the shaky and highly uncertain macroeconomic environment in the U.S. remains a major impediment to investors feeling bullish enough to invest heavily in risky cryptos.

Another drag on Solana has been quite simply a general lack of enthusiasm among investors. The coin's price was, at its recent peak, near its all-time high. Yet rather than investors broadcasting euphoria about it across social media, the predominant attitude was one of skeptical caution.

What's causing the gloominess? A fixation on the coin's relative performance. Solana, which is up 8% this year (as of Sept. 30), has been trailing nearly every other major cryptocurrency in 2025.

The investment thesis is still strong here

Short-term price volatility rarely says much about whether a network is winning durable mindshare and capital. On those fronts, Solana is doing better than ever, and its gains will likely accelerate in the medium term rather than slow due to three key factors.

First, Solana's decentralized finance (deFi) total value locked (TVL) has marched to a high of $11.3 billion, alongside a growing stablecoin base that's currently worth $13.8 billion. Heavy transaction throughput, along with the above, are all signs of active, paying users rather than idle speculators buying the coin. And its ecosystem usage has been robust relative to peers in recent months. That's important: Its ecosystem is the foundation of the chain's value.

Then there is the trend toward real-world asset tokenization, which is to say, the movement to issue real-world financial assets as programmable crypto tokens.

Solana has quickly become one of the preferred networks for issuing and trading tokenized stocks in particular, thanks to its cheap fees and rapid transaction times. It currently hosts $71.7 million in tokenized shares, up from practically nothing in late June. While that rate of growth in tokenized assets held on its chain will probably not persist forever, at the moment, it's a gold rush, and Solana is one of the best platforms selling shovels.

Those tokenization gains dovetail with another highly bullish structural theme: the rise of digital asset treasury (DAT) companies accumulating crypto on their balance sheets. DAT companies now hold roughly $105 billion in crypto, and could become long-term ecosystem anchors, which are precisely the kind of holders who reduce the number of token available for public trading. This crimped supply tends to put upward pressure on prices. There are already a handful of DATs holding Solana, and more might begin to do so.

The third possible catalyst is the potential approval of Solana exchange-traded funds (ETFs). The U.S. Securities and Exchange Commission (SEC) just streamlined its process for deciding on whether to approve spot crypto ETFs. In response, a wave of asset issuers, including Franklin Templeton, Fidelity, Grayscale, VanEck, and 21Shares, filed or amended their spot Solana ETF registrations, with some including staking features so holders can earn interest-like yields.

Although the timing of an approval is never guaranteed, a clearer path to Solana ETFs exists than a few months ago, and the SEC will weigh in on the issue in early October. ETF arrivals would create a new onramp for capital, which could also help boost the coin's price.

In light of all of this, it would be best to treat the recent price slip as noise. There's a lot to be excited about with Solana, and it's still very much worth buying regardless of its short-term price decline.

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Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Solana. The Motley Fool has a disclosure policy.