Solana soars 19% thanks to an AI memecoin frenzy

While the broader crypto market continues to consolidate this week following early October lows, Solana’s gains have outpaced those of the largest cryptocurrencies. Sol is outperforming Bitcoin, Ethereum, XRP and others included in the CoinDesk 20 Index. Solana is up 19% over the last seven days while, in contrast, Bitcoin is up 0.8%, and Ethereum and XRP are down 3%. 

This month’s price action from Solana, which touts itself as an alternative to Ethereum’s high fees and slow transaction rates, has brought SOL to a new all-time high against Ethereum, with 1 Sol equivalent to 0.07 Ethereum, and the highest price against Bitcoin since August. 

AI memecoins have captivated the crypto community since Goatseus Maximus, a new memecoin, sparked conversation about the intersection of the two technologies. The frenzy has sent daily active users on the Solana blockchain to a record high of almost 9 million and caused transaction fees on Wednesday to reach a high of $4.5 million, according to DeFiLlama data.

Goatseus Maximus, or GOAT, was created on October 10 by an anonymous developer known as Pump.fun and gained massive attention when Marc Andreessen-backed AI bot Truth Terminal endorsed it on X. 

The token, founded on the AI bot’s fixation with goat memes, has reached a market cap of $722 million since its creation two weeks ago and triggered a flurry of new AI-created memecoins. 

The sector has reached a market cap of over $2 billion, up 24% in the last day, according to CoinGecko. Other Solana-based memecoins are up in the frenzy as well. “Popcat” and “cat in a dogs world” are both up over 20% this week.  

Another factor in Solana’s recent run may be the ongoing rapid expansion of decentralized finance, or DeFi. 

Solana is up more than 450% this year. Since January, the total value locked on Solana—the U.S. dollar value of digital assets staked on a blockchain through DeFi— has almost quadrupled to $6.9 billion.