Solana Just Got an Enormous Green Flag From President Trump

In the evening of Jan. 17, then President-elect Donald Trump took an action that's one of the largest green flags possible for the future of the Solana (CRYPTO: SOL) blockchain and its merits as a cryptocurrency.

Now, with Solana reaching new all-time highs, and other catalysts taking shape to send its price even higher, there's little to suggest that any headwinds are mounting. Here's what happened and why it's a very positive sign for the future of this coin as well as for other cryptocurrency investments in general.

A new major meme coin arrives on the scene unexpectedly

Everyone has heard of meme coins like Shiba Inu, Dogecoin, and perhaps some of the newer players on the scene like Popcat. While it isn't common, some celebrities have launched meme coins of their own, often to disastrous results for investors. It's no secret that the asset class doesn't have a very good reputation.

But now, there is a very good chance that investors are going to see the meme coin category in a different light after Trump launched the Official Trump meme coin, with the ticker TRUMP.

Its market cap is now roughly $8.3 billion, down from its peak of about $9.6 billion on Jan. 19; it's now one of the largest meme coins in existence. Notably, the coin's fully diluted value (FDV) is much higher than its market cap, and is currently about $35 billion. The FDV accounts for the value of tokens that are currently locked and not in circulation, but that eventually will be circulated, as defined per the coin's vesting schedule.

The coin's meteoric ascent immediately after its launch is unprecedented thus far. And, most importantly for investors, the coin was launched on the Solana blockchain directly, without the cooperation of any centralized cryptocurrency exchanges.

In other words, Solana is the coin that investors need to buy before they can invest in the president's cryptocurrency. The why Solana's price surge by 12% on Jan. 19 alone, before it gave back some of the gains. Volume on the chain was more than $28 billion on that day, marking a heavy load that most other blockchains never reach. While network congestion did occur, delaying transactions significantly and causing problems for investors, overall it's doubtful that any other chain could have handled such a sudden and massive volume influx any better.

Since then, First Lady Melania Trump has launched a cryptocurrency bearing her name. Both coins are linked to websites that claim that neither are investment opportunities or securities, perhaps in an attempt to avoid oversight by the Securities and Exchange Commission (SEC). Given Solana's ongoing troubles with the SEC and the question of whether it's a security or not, that legal language is to be expected.

Don't pan for gold, sell shovels

In light of the above, it's obvious that meme coins now have mainstream acceptance and adoption among the individuals at the highest level of the U.S. government. That means investors should expect a blitz of activity in such coins.

For most people, however, these tokens are simply much too risky to invest in beyond a trivial amount that you'd be comfortable losing.

These assets are incredibly volatile, not backed by any clear set of fundamentals, and, as many aren't listed on cryptocurrency or traditional financial exchanges yet, they require at least a modicum of additional effort to even purchase. Furthermore, there isn't necessarily an investment thesis for holding them over the long term, though given the length of a presidential term, it would be a bit surprising if the president's coin didn't continue to show signs of life for at least four years or so.

There's still a way to take advantage of this new era of meme coin investing. Buying Solana now looks more attractive than ever because it's the blockchain where a large portion of the meme coin creation and investing activity occurs. Presently there's no reason to suggest the trend is doing anything other than accelerating.

So if the president or other major figures end up launching more meme coins, they're likely to choose the same chain because it's what their teams will be familiar with, and it's where the additional traffic is the least likely to cause issues. And for holders of Solana, there's no better sign of good times ahead than that.