Howdy!

It’s Wednesday, so we’re bringing you a midweek market update courtesy of Jeff. That’s my quant. My quantitative. Look at him.

Today, we’ve got that market update, Solana’s falling REV, and Foundation Capital’s $600 million fund:

SOL drags on tariff fears

It’s been three days since President Donald Trump's surprise news that SOL would be part of his upcoming US crypto strategic reserve. If that happens (and frankly it remains a big “if”), the inclusion will place SOL alongside BTC, ETH, XRP, and ADA in a government-held reserve of digital assets.

SOL quickly surged to a local high of $178 on the news, followed by an equally swift retracement. Too much adrenaline for a Sunday. Without a clear timeline for implementation, short-term traders took their exit, leaving SOL to settle around $141 at time of writing.

Still, let’s not be dramatic. That’s a 10% gain from its $128 price right before the announcement. Not bad, considering how rough the market was looking in the lead up.

Zooming out, SOL has also been tossed around by broader market turbulence. The escalating US trade war — with tariffs on China, Mexico and Canada triggering countermeasures — has created uncertainty, pressuring equities and risk assets, including crypto. Bitcoin, which hit $95,000 on the Trump news, has since slumped to $88,400, reinforcing crypto’s continued correlation with macro conditions.

Meanwhile, Solana-specific factors have likely influenced its pullback. Onchain activity has cooled. Active addresses have dropped from 18.5 million in November to 8.4 million by late February. Much of last year's memecoin hysteria has also waned, with pump.fun seeing a 63% drop in trading volume last month. 

Despite the retrace, big money interests don't seem particularly spooked, and institutional interest in SOL remains strong. The CME recently announced plans to launch Solana futures on March 17. This should attract hedge funds and institutional traders who have been waiting for a more regulated way to get exposure.

So where to now? I’d bet on stabilization before another push to $160-$180. But if the sell pressure drags us below our current levels, we’re looking at $125 as the next real floor. Either way, expect more volatility. Nothing happens quietly in Solana.

— Jeffrey Albus

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It’s looking pretty September-y out there:

Solana’s real economic value — a combination of tips and fees that measures the demand to transact on Solana — has retraced to pre-election levels, per Blockworks Research data.

Solana totaled $18 million in REV last week, the lowest level since the last week of September. Evidence continues to accumulate that nothing was the same after MELANIA coin.

— Jack Kubinec

Foundation Capital raised $600 million for its 11th fund.

The Silicon Valley-based fund and early Netflix investor struck a number of deals in the Solana world after investing in Solana’s first round in March 2018. In addition to Solana, Foundation invested in Helius, Ore, elmnts, Cube, and Sanctum among others, according to crypto investment tracker CryptoRank.

“Our portfolio companies are a mix of crypto native startups and those at the intersection of crypto x fintech or enterprise AI, where we can leverage the expertise of the broader Foundation Capital team,” Foundation partner Alejandra Martinez told me in a direct message. “We are more excited than ever about the future of Solana and believe many of the new opportunities for the fund will come from this ecosystem.”

— Jack Kubinec

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This conference is for the engineers, founders, and devs building the next cycle’s backbone. If you’re scaling infra, rewriting DeFi, or experimenting with new primitives, Permissionless IV is where you stress-test your vision.

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June 22-26 | Brooklyn, NY

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