Solana TVL Surges as Altcoin Market Declines Post Pump.Fun Launch

• Solana’s TVL soared past $8B post-Pump.Fun drawing liquidity from altcoins and reshaping the crypto landscape
• Smaller altcoins are losing ground as capital shifts to Solana dropping their market share below 15 percent versus Bitcoin
• Investors now favor low-cap Solana tokens over traditional altcoins altering market cycles and sentiment

The cryptocurrency shifts as Solana’s Total Value Locked (TVL) experiences exponential growth. Meanwhile, the broader altcoin market continues its downtrend relative to Bitcoin’s dominance. The launch of Pump.Fun marks a pivotal moment in this transformation. 

Since its inception, speculative capital that once fueled altcoin rallies has instead gravitated toward Solana-based projects. Consequently, this redirection of liquidity has left many altcoins struggling to regain momentum. The result is a divided market where Solana thrives while smaller altcoins face liquidity challenges.

Solana’s TVL Skyrockets Post-Pump.Fun Launch

Solana’s TVL remained stable throughout early 2023. However, a noticeable shift occurred in late 2023 when an influx of capital drove rapid growth. The turning point aligns with the launch of Pump.Fun, as indicated by the vertical orange marker on the chart.

Following this event, Solana’s TVL surged, surpassing $8 billion by early 2025. The continued rise suggests increasing investor confidence in Solana-based applications and protocols. Moreover, this growth has positioned Solana as a leading blockchain for DeFi innovation.

Altcoin Market Faces Continued Decline

Conversely, the market capitalization of the top 125 altcoins (excluding the top 10) paints a different picture. A declining trend persisted throughout 2023, with brief periods of recovery failing to sustain upward momentum. Despite occasional rebounds, the overall market share of these altcoins continued to erode into early 2025.

The post-Pump.Fun landscape has been particularly harsh on smaller altcoins. As capital flowed into on-chain low-cap assets, many traditional altcoins struggled to attract investment. This shift has limited their ability to participate in broader market rallies. Consequently, their share of the market has dropped below 15% relative to Bitcoin’s dominance.

Market Shifts and Investor Sentiment

Crypto analyst Miles Deutscher links these trends to the changing nature of speculative investments. Historically, funds would rotate into top 200 altcoins during bullish cycles. However, the rise of low-cap Solana-based tokens has redirected liquidity away from traditional altcoins.

Additionally, while early investors profited many latecomers suffered losses as illiquid assets retraced sharply. This has led to broader skepticism among retail investors. The combination of market shifts and declining sentiment underscores the evolving dynamics of the cryptocurrency space.