Blockchain
What will push Solana to its all-time high of $260? Three analysts speak – DL News
- Bitcoin surpassed its all-time high in March, but Solana is still 50% away from its all-time high.
- High trading volumes, institutional adoption, a growing ecosystem and network developments will spur network growth, analysts say.
Few cryptocurrencies have attracted the attention of investors as much as Solana.
Strongly championed as an alternative to Ethereum by Sam Bankman-Fried, then CEO of FTX, Solana rose 14,030% in 2021 before plummeting 97% as FTX collapsed.
Considered dead by most traders and investors, Solana has staged a comeback story, rising nearly 800% over the past 10 months to reach $128. Now, investors are wondering whether the network coin will ever reach its all-time high price of $260 again.
“The Solana ecosystem is still what interests me the most,” said Quinn Thompson, founder of crypto hedge fund Lekker Capital DL News.
“Solana is this new, shinier, faster network with great traction, Bitcoin is a long-standing major with its ETFs, and Ethereum is kind of caught in the middle,” he said.
And the cryptocurrency may still have a long way to go, said Joshua de Vos, head of research at crypto data firm CCData DL News.
“Despite Bitcoin having already reached its all-time high this year, Solana is currently still 50% from its [own]”de Vos said, attributing the discrepancy to Bitcoin exchange-traded funds and the flows that led to the leading cryptocurrency.
However, de Vos said Solana will likely reach its all-time high soon “if Bitcoin maintains a positive trajectory.”
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Memecoin exchange
The network has become particularly popular with memecoin traders in recent months thanks to its low transaction fees.
“There has been renewed excitement around Solana since late 2023,” said Adam Morgan McCarthy, an analyst at crypto analytics firm Kaiko Research DL News. “This was especially evident when BONK, a memecoin on Solana, rallied 40% in December following its listing on Coinbase.”
The resulting trading frenzy even pushed Solana above Ethereum in terms of trading volume on decentralized exchanges in March, McCarthy said.
“People are naturally attracted to low transaction costs,” Thompson said. “If you reduce transaction fees, you increase volumes, because there will be a greater speed of activity. This has been shown to be the case with Solana.”
Institutional adoption
Solana could also quickly become the darling of large corporations and financial institutions.
While Bitcoin has seen substantial outflows from institutional investment products over the past three weeks, Solana has continued seeing regular inflows, according to a Monday report from CoinShares.
And fintech giant Stripe revealed last week that will allow users to make stablecoin payments using Solana or Ethereum.
“It was interesting that Stripe co-founder John Collison chose to demonstrate the company’s upcoming crypto solution using Solana,” McCarthy said. “Solana’s growth will likely be influenced by use cases beyond memecoins and airdrop agricultural”.
Network development
De Vos, meanwhile, highlighted the development of the Solana ecosystem, with new applications and decentralized utilities built on the blockchain.
The business “has grown significantly and is on track to maintain that,” de Vos said.
And while Solana still suffers from it network congestion and failed transactionsfuture updates will likely fix these issues and help expand the blockchain further, he said.
Same thing with network outages, as Solana has been criticized for its periodic downtime in the past.
“Solana needs to keep the network operational to instill confidence in users,” de Vos said.
Tom Carreras and Eric Johansson write about markets for DL News. Do you have a tip about Solana? Contact tcarreras@dlnews.com