Solana surpasses XRP to become the fifth-largest cryptocurrency, driven by the frenzy surrounding meme coins.

Solana (SOL) has surpassed XRP to claim the position of the fifth-largest cryptocurrency, achieving a market cap of $33.7 billion, marking a 20-month high, according to CoinMarketCap. Despite overcoming selling pressure linked to holdings in the FTX bankruptcy estate, SOL’s recent surge is attributed to the vibrant decentralized finance (DeFi) ecosystem and the hype-driven craze for meme coins.

This week, the total value locked (TVL) on Solana exceeded $1 billion for the first time since FTX’s collapse in November of the previous year. This growth is propelled by increasing asset prices and consistent inflows into DeFi protocols. Decentralized exchanges on the Solana network have witnessed a surge in trading volume. On December 15, Orca facilitated $746 million in volume, a significant increase compared to the period before November when it exceeded $100 million only once. Notably, meme coins like Bonk, a dog-themed token with a market cap now exceeding $1.2 billion, have played a significant role in driving this heightened activity.

As speculators actively seek the next meme coin with transformative potential, traders commonly acquire Solana as the underlying asset before converting it into their preferred meme coin. Subsequently, when they sell the meme coin back into Solana, it triggers a wave of buying pressure.

While the focus has primarily been on meme coins, Solana itself has garnered attention due to its improved network stability following a series of outages last year. Furthermore, Solana has distanced itself from FTX, which collapsed after purchasing $1 billion worth of Solana-based tokens before filing for bankruptcy.

As of now, SOL is trading at $81.04, marking a 9.14% increase over the past 24 hours. The trading volume has surged by 39% to reach $2.6 billion, according to CoinMarketCap.