Is Solana a Good Investment in 2024?
Since holding its ICO in 2020, Solana’s value has increased by over 100,000% – meaning it’s now one of the largest cryptocurrencies by market capitalization. But is Solana a good investment in 2024?
This guide examines the Solana investment thesis, covering fundamental and technical analysis, SOL price predictions, and potential risks. Read on to assess whether Solana is the right cryptocurrency project for you.
How Has Solana Performed as an Investment?
Solana is one of the best-performing cryptocurrencies of all time. The project held an initial coin offering (ICO) in March 2020, with early investors securing the lowest price possible. In the weeks to follow, Solana was listed on multiple cryptocurrency exchanges. Solana has enjoyed a solid upward trajectory ever since.
Based on current prices, Solana trades over 27,000% more than its original listing price. This means a $1,000 investment in 2020 would be worth over $170,000 today. That said, Solana was originally sold to ICO investors at $0.22. This increases the overall growth performance to more than 100,000%.
CoinMarketCap data shows that Solana currently trades 42% below all-time high prices. This means new Solana investors can enter the market at a more favorable valuation. In addition, Solana was built with the proof-of-stake consensus mechanism. This enables Solana investors to earn passive rewards – simply for staking their coins.
Staking rewards are funded by an 8% inflation rate. While its inflationary model dilutes existing holders, this is minute compared to Solana’s long-term gains. Ultimately, Solana continues to outperform the broader markets, especially its main smart contract competitor, Ethereum.
Solana Price History Timeline
Let’s take a closer look at Solana’s price history. A close Solana price analysis will help investors answer the question: is Solana a good investment in 2024?
Solana ICO
Solana held one of the best cryptocurrency ICOs in March 2020. According to CoinCodex, Solana’s ICO was priced at $0.22 per SOL. The ICO raised more than $1.76 million in total.
This is inconsequential, considering Solana is now worth tens of billions of dollars. Nonetheless, this highlights how lucrative ICO investments can be for early backers.
Initial Listing and 2021 Peaks
Solana was listed on exchanges in June 2020. The initial listing price was $0.9511. This means that ICO investors had an immediate upside of over 330%. However, those holding onto their Solana investments over the following months would have made considerably more.
By early 2021, Solana surpassed $10. Parabolic price appreciation continued for most of the year. Like many cryptocurrencies, Solana’s value peaked in November 2021. It secured an all-time high price of $260.06. So, when compared to the ICO price of $0.22, this represents growth of over 100,000%.
Bear Market Decline
After peaking in late 2021, like most cryptocurrencies, Solana entered a prolonged bear market. By February 2023, Solana’s price declined below the $10 level. This mirrored its valuation from two years prior.
More alarmingly, Solana’s $10 price tag meant the cryptocurrency had declined by over 95% from its all-time high. This offered an excellent opportunity to invest in Solana at rock-bottom prices. After all, Solana has since recovered most of its bear market losses.
New Bull Cycle Begins
Since hitting lows of under $10, Solana has enjoyed a prolonged upward trajectory. For example, Solana’s 52-week high now stands at $209.70. This was achieved in March 2023. Meaning – those buying at $10 one year earlier would have witnessed growth of 2,500%.
Today, Solana’s market price is just under $150. This means Solana is trading at a 42% discount from all-time highs. It’s also trading 28% below its 52-week peak, meaning the markets are currently in a correction zone.
Solana Price Forecast
Solana price predictions will vary widely from one analyst to the next. While nobody can predict future prices in the crypto market with any certainty, let’s assess Solana’s potential in the coming years.
Solana Price Forecast 2024
We’re now in Q2 2024, and the average trading price of Solana is at a huge discount from previous market peaks. Considering Bitcoin’s recent halving event, many analysts believe that Solana could reach new all-time highs.
However, this might not come until 2025. In the meantime, Solana needs to regain its prior all-time high of $260.06. From current prices, this would require an upside of over 70%.
Solana Price Forecast 2025
Based on historical cycles and previous Bitcoin halvings, 2025 could see many projects record new all-time highs. Some analysts believe that Solana could replicate Ethereum’s market cap before the next bull market peaks.
Currently, that’s about $380 billion. Solana is currently valued at about $66 billion. Therefore, to meet these predictions, Solana would need to increase by 5.7x, giving it a marker price of about $850.
Solana Price Forecast 2030
Is Solana a good investment for long-term holders? Looking further ahead, Solana’s price forecast for 2030 becomes even more speculative.
Solana’s true potential depends on its market share in the broader smart contract and decentralized application industry.
For example, a VanEck Solana price prediction believes that Solana could reach over $3,200 in 2030. Based on current prices, this would mean an upside of over 2,000%.
However, this Solana coin price prediction is based on a key requirement: Solana must onboard more than 100 million users. In contrast, VanEck’s report also yields a potential bearish outcome; its lower-end price forecast for 2030 is under $10.
Is Solana a Good Long-Term Investment?
It’s important to look at the long-term picture when exploring the question: is Solana a good investment? After all, long-term Solana holders have secured the greatest returns.
Let’s assess Solana’s long-term potential with a specific focus on the fundamentals.
Low Fees and Fast Transaction Speeds
Solana is a cost-effective blockchain ecosystem with unparalleled speeds. Based on current statistics, Solana claims that the median transaction fee is just $0.00064. Solana’s block confirmation time is just 400 milliseconds.
The Solana project claims that block finality times will get even faster as hardware capabilities improve. What’s more, Solana transactions are energy-efficient. It claims that transactions have a 0% net carbon impact on the environment.
Excellent Scalability
The Solana blockchain also offers excellent scalability, meaning it can handle substantial transaction throughput. Estimates suggest that Solana can process up to 65,000 transactions per second.
According to a Visa report, Ethereum handles just 12 transactions per second. This makes Solana a lot more attractive for the Web 3 era – especially considering its low fees, fast transaction times, and energy efficiency.
Growing Ecosystem of Tokens
Strong scalability allows Solana’s ecosystem to grow over time – without requiring layer 2 solutions. While decentralized applications have historically preferred Ethereum, a major shift is taking place. For example, some of the best Solana meme coins have shown rapid growth in recent months.
Dogwifhat is the stand-out performer, with the meme coin surpassing a market cap of $4 billion. Bonk has also performed well, with a 12-month growth of almost 5,000%. Decentralized exchanges in the Solana ecosystem have also witnessed huge gains, with market leaders including Jupiter and Radium.
A range of stablecoins, including Tether and USD Coin, have also joined the Solana network. Crucially, from an investment perspective, the more Solana tokens there are, the better. All network fees, whether wallet-to-wallet transfers or smart contract execution, require SOL. This means the demand for SOL increases as more tokens launch on the Solana network.
Developer-Friendly Environment
Solana’s native programming language, Rust, was built from the ground up. It offers a developer-friendly experience, which is crucial when attracting new blockchain projects.
The Solana ecosystem is suitable for every development project imaginable, from decentralized exchanges and play-to-earn games to metaverse experiences.
What Does The Future Hold For Solana?
Some cryptocurrency analysts believe that Solana has a very bright future. It could play a major role in the Web 3 era, which will include decentralized finance (DeFi) services and the Internet of Things (IoT). Unlike Ethereum, Solana doesn’t rely on layer 2 solutions to meet its scalability demands.
What’s more, Solana transactions are considerably cheaper and faster than Ethereum. The correlation between increased ecosystem growth and Solana’s price potential will become clearer in the coming years. As mentioned, SOL is the only transactional currency accepted on the Solana network, so demand is expected to increase over time.
However, the Solana blockchain isn’t without its challenges. During the recent meme coin rally, Solana faced ongoing network congestion. This temporarily resulted in over 75% of transactions failing to reach finality. This meant that a majority of users were unable to engage with the network.
Since launching in 2020, the Solana blockchain has experienced several other network outages, although fixes have always been prompt. If major outages are a common occurrence, investors could lose confidence in Solana’s capabilities, which could negatively impact Solana’s price. In contrast, Ethereum has faced no similar issues, owing to its fully decentralized model.
Nonetheless, Solana could still be worth just a small fraction of its true potential. If it eventually surpasses Ethereum as the de facto smart contract network, it could become a trillion-dollar project. All that said, it makes sense to hedge your investments across both Ethereum and Solana, alongside other layer 1 ecosystems in the cryptocurrency market.
What Experts Say on Whether You Should Buy Solana
It’s wise to see what the experts say when exploring the question: is Solana a good buy?
- We mentioned earlier that VanEck has a wide price forecast for 2030. The best case scenario is Solana onboards over 100 million users and secures a price of over $3,200. The bear case is Solana drops below $10.
- Although ARK Invest CEO Cathie Wood recognizes Solana’s speed and cost-effectiveness, the long-term view is that Ethereum will remain the leading smart contract platform.
- Matt Hougan, CEO of crypto hedge fund Bitwise, shares similar views to Wood. Hougan says that “the race is Ethereum’s to lose, and chances are it will be the dominant platform.”
Ultimately, Solana’s investment thesis will largely depend on Ethereum’s network performance in the coming years. If Ethereum can vastly improve scalability and network fees, Solana could become irrelevant. Similarly, Solana could face additional competition from other blockchain initiatives.
Just remember, the industry has seen many so-called ‘Ethereum Killers’ in recent years, including EOS, TRON, and Cardano. Even so, Ethereum remains the number one choice for decentralized applications.
Conclusion – Is SOL a Good Investment?
In summary, we’ve helped answer the question: is Solana worth buying in 2024? Solana remains one of the best-performing cryptocurrencies in recent years, with post-ICO gains of over 100,000%. What’s more, an increasing number of decentralized applications are turning to Solana owing to its fast, low-cost, and scalable transactions.
However, as explained by Bitwise CEO Matt Hougan — the smart contract race is Ethereum’s to lose. Therefore, investors should remain cautious about Solana’s true potential. Nonetheless, Solana currently trades at an attractive discount from all-time highs, so there’s still plenty of upside to target.
FAQs
Is Solana a buy right now?
Solana currently trades 42% below all-time highs, meaning new investors can secure a solid discount. Market corrections are always the best time to buy, so Solana’s current price could represent good value.
Does Solana have a future?
Solana’s future largely depends on Ethereum’s ability to improve scalability and reduce fees. Solana could vastly improve its market share if Ethereum is unable to achieve these goals.
Can Solana reach $500?
Solana has every chance of reaching $500. Based on the current supply, Solana would need to reach a market cap of about $220 billion, which is still a fraction of Ethereum’s valuation.
How high can Solana realistically go?
According to a VanEck report, the Solana price could hit $3,200 by 2030. However, this is the best-case scenario based on Solana onboarding 100 million users.
References
- Solana: A new architecture for a high (Solana)
- VanEck’s Base, Bear, Bull Case: Solana Valuation by 2030 (VanEck)
- A deep dive on Solana, a high performance blockchain network (Visa)
- Solana price data (CoinMarketCap)
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