Over the past few years, the Solana token (SOL) has experienced successes and challenges. For instance, within a period of 3 years, its price dipped from its all-time high of $259.96 on 6 November 2021 to as low as $17.33 on 10 March 2023. However, that was not the end of the good days for the token as it rebounded to $121.45 on 26 December 2023.
The current trend indicates that it can soar back to its all-time high attained in November 2021. This article will analyze the reason why SOL is best positioned for the next bull run. We shall also look at its strengths as we look forward to the next rally.
Finally, we shall discuss why SOL is a good investment asset.
Shift from Ethereum to Solana: Kruger Highlights SOL’s Unique Strength Amidst Emerging Blockchain Competition
As previously stated, the Solana crypto (SOL), popularly referred to as the Ethereum Killer, picked up much momentum in the fourth quarter of 2023, gaining by over 300%. With such a price surge SOL, the fourth largest cryptocurrency by market capitalization, has shown that it has all it takes to compete strongly with Ethereum, the number one altcoin.
Alex Kruger, a renowned economist and crypto analyst, recently said that SOL will be the best cryptocurrency for the ongoing bull run. His conclusion was based on the comparison between Solana and Ethereum and other major altcoins including Scroll, Core DAO, Monad, Eclipse, and Aztec. Basically, these cryptocurrencies compete directly with Ethereum since it is the leading altcoin.
According to Beincrypto, most of these coins and tokens are competing with Ethereum since many investors buy Solana and hold it due to its high utility.
Kruger said, “Ethereum is a second or third-generation asset that everybody in the West already holds. We already made our money, so we are too attached to it, we protect it, we shield it, we pitch it. But the new guys don’t want to buy our bags, they want new bags.”
During February alone, SOL has shown much more bullish momentum on the market than Ethereum. The following graph indicates the performance of SOL and ETH during the first part of February.
Ethereum vs. Solana Price Performance: TradingView
As the diagram indicates, SOL has been much more bullish than ETH during that period. Infact, SOL started outperforming Ether in October 2023.
It is not just the Solana price prediction and current performance that make people believe that SOL is a good bet for the next bull run. The coin has much utility and other fundamentals such as a strong backing community and innovative capacity. As a result, many investors trade and hold Solana.
Innovative Capacity
Many developers want to establish their decentralized applications on it due to several essential features like ultra-fast speeds, low gas fees, and scalability. Therefore, the network has a community of dedicated DeFi project founders and builders.
In addition, the users can easily set up their protocols for autonomous operations which include automatic data sharing and issuance of payments at predefined times and predetermined conditions.
Referring to this Kruger said, “On Solana, there are a lot of very good applications that don’t exist on Ethereum because of speed and how cheap it is. I think there is going to be so much more innovation happening in Solana that cannot happen in Ethereum.”
Infrastructural advantage
The Solana blockchain has various features that make it stand out among many blockchains. For instance, its high transaction speed and cost-effectiveness make it an attraction among developers and other users. Many projects build their DeFi decentralized applications and NFT infrastructures on the blockchain which attracts many users to invest in Solana.
As an example, projects like Hive Mapper and Parcl have established their digital projects on the blockchain. These projects would not use the Ethereum blockchain because it has no features that support its protocols and functionalities.
Recently, Solana rolled out various upgrades to increase its network efficiency and capacity. The upgrades that include the stake-weighted quality of service and confidential transfer protocol are earmarked to further enhance the network’s smooth operation. It has also updated its Developer tooling and education facilities as part of its continual improvement program.
Solana Suitable for Various Decentralized Applications
As hinted above, the Solana infrastructure has the capacity to support dApps that have different requirements. Due to its robustness, Solana has an average of over 2,500 active monthly developers, with a developer retention rate of over 50%.
Dominance in DeFi and NFT Sectors
One reason Solana is likely to perform well in the next bull run is its dominance in the DeFi and NFT sectors. The network often records high transaction volumes due to DeFi and NFT activities. Thus, its volumes in DeFi, GameFi, and NFTs have rivaled that of Ethereum.
An important aspect that has driven trading volumes on the Solana network is the airdrops and attractive DeFi yields that the applications on the blockchain offer. Over the past months DeFi applications on Solana which include Jito gave airdrops to Solana users, making the network very attractive and popular.
Also, several meme coin projects are excelling on the platform. The meme coins such as the Dog Wif Hat (WIF) have recorded high trading volumes. On average the daily trading volumes of Solana’s leading meme coins had been ranging between $40 million and $50 million in the past few months. In the case of Ethereum its major meme coins had been failing to garner more than $3 million in daily trading volumes.
Is Solana a Good Investment?
The Solana coin has much utility which is likely to keep on driving its value upwards. People can use SOL to make payments for goods and services through the peer-to-peer system. Also, the Solana coin supports most activities that occur on the network which often drives the SOL price up.
It is the coin that the network validators get as an incentive for securing the blockchain. In addition, the coin is available on many trading platforms and exchanges including Gate.io, Binance exchange, Kraken, and Coinbase, among others, which increases its demand and makes it a good investment asset.
Solana Price History and Prediction
The Solana crypto, launched in 2020, has gained much traction. At the time of writing, the SOL price is $179.41, after gaining 7.69% in the last 24 hours. However, the next monthly chart shows, SOL is in a downtrend.
Solana Price Movement – CoinGecko
Pertaining to the Solana (SOL) price prediction, Gate.io Price Prediction that its value may fluctuate between $120 and $150 by the end of 2024. Nevertheless, Gate.io Price Prediction is overly optimistic about SOL’s performance. It predicts that the Solana price may reach $461 by the end of the year.
If you wish to check the SOL price prediction made by us, click here.
Conclusion
Many analysts believe SOL will be one of the leading crypto in the net bull run which many analysts assert will start after the 2024 bitcoin halving event, earmarked for April.
The reasons why the Solana crypto may outperform many cryptocurrencies including Ethereum in the next bull run include a robust infrastructure, its support for peer-to-peer payments, and a vibrant community of developers and other users.
