Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject.
Solana (SOL) is the ninth-largest cryptocurrency in the world right now, with the same founded over two years ago. It is built on the proof-of-stake (PoS) consensus mechanism. It is also one of the first cryptocurrencies to use the innovative proof-of-history (PoH) mechanism. Founded by Anatoly Yakovenko, Solana has slowly emerged as a strong competitor to Ethereum in the global cryptocurrency market.
At its 2020 launch, Solana was trading at below $1 and rose by around 12,000% in 2021, remaining bullish almost throughout 2021. On 6 December, it rose to its ATH of $258.93.
Though the recent Ethereum Merge has impacted the crypto-industry, Yakovenko said in an interview with Bloomberg Technology,
“When you look at the number of transactions that Solana handles from applications and from users on a daily basis, that’s more than not just Ethereum but all Ethereum-based blockchains combined. So I think Ethereum has a long way to go on scalability.”
Its increasing popularity can be assessed by the fact that popular American comedian and television host Steve Harvey also joined the bandwagon. He did so when he changed his Twitter profile to that of a Solana Monkey Business NFT in September last year.
American singer Jeson Derulo tweeted about his excitement for the token last year, saying that he betted on Solana and enjoyed the ride.
Solana has raised around $335.8 million over 9 funding rounds, with Alameda Research, Andreessen Horowitz and Polychain being its leading investors.
The current year so far has, however, proven to be highly volatile for all cryptocurrencies and Solana didn’t escape this brunt either. So far, its maximum price this year has been $136.38, dated 3 April. Solana’s blockchain was recently hacked and thousands of users reported losing their funds worth around $8 million.
At the time of writing, the altcoin was trading at just under $33, on the back of the weekend’s price depreciation. In fact, the altcoin was down by over 2% over the last 7 days.
In early August this year, thousands of Solana accounts were drained. The Solana Foundation, however, told the Financial Times that it “does not appear” that the exploitation had affected its core infrastructure, but rather was caused by a bug “in software used by several wallets popular among Solana users”.American cryptocurrency billionaire, Sam Bankman-Fried, the CEO of the FTX exchange, said in an interview with Fortune that SOL is the most “underrated token right now … at least as of a month ago.” He added that though the Solana system exposed itself to many vulnerabilities, it has continued to push boundaries and this is what blockchains need to do in order to grow.
Cryptocurrency VC fund Cyber Capital’s Justin Bons is however not as enthusiastic as SBF. He tweeted that Solana has far too many red flags such as multiple downtimes.
The Solana network is currently one of the best places to explore NFTs and DeFi apps. Billionaire entrepreneur Reid Hoffman, better known as the co-founder of LinkedIn, announced on Twitter this July that he is releasing a series of Solana-based NFTs based on images created using OpenAI’s DALL-E 2 AI software. He added that he would auction the first piece starting on Magic Eden, the largest Solana NFT marketplace. Magic Eden is the leading NFT marketplace on Solana. Its focus on the artistic community, availability of simple tools, and the diversity of tokens created and offered make it a force to be reckoned with in the NFT community.
Essentially, Solana has emerged as a paradigm for other blockchains looking to grow.
Why these projections matter
Today, Solana is one of the fastest-growing cryptocurrencies in the market with almost 100 billion transactions so far. The average cost of a transaction on the platform is $0.00025, making it one of the most economical altcoins in the crypto-universe. With 1,850 validator nodes, it claims to be one of the most secure blockchain networks too.
The Solana Foundation has announced that a total of 489 million SOL tokens will be released in circulation. Currently, there are a little under 300 million tokens already in circulation.
Today, it is the 9th largest cryptocurrency in the market, with a market capitalization of almost $12 billion. The Solana blockchain has eight features, including PoH, Cloudbreak, and Sealevel. Thanks to its high speed and low cost, Solana has successfully attracted the interest of both retail and institutional investors across the globe. Solana promises to its customers that there shall be no increased fees and taxes. Its low transaction fees doesn’t compromise with either scalability or processing speed of the protocol.
What is unique about the Solana blockchain is that it is the first platform to adapt the “proof of history” mechanism for crypto mining. A 2017 white paper published by Yakovenko detailed a timekeeping method that he called proof of history. The paper argued that the long time needed to reach a consensus over a transaction on conventional blockchains such as Bitcoin and Ethereum has acted as a barrier towards the scalability of these projects. To counter this challenge, the paper suggested a new method of consensus – proof of history – that creates a ledger recording events as and when they occurred.
The validation process on Solana is done through an innovative combination of proof-of-history and proof-of-stake consensus mechanisms, attempting to win over the twin issues of security and scalability as had been faced by the Ethereum network.
What is unique about the Solana blockchain is that it is the first platform to adapt the “proof of history” mechanism. Its innovative approach to technology has gained significant traction in the market. Ergo, investors must be well aware of its previous performance, current market sentiment, and future predictions.
In this piece, we shall closely observe the key performance parameters of Solana, with particular emphasis on its price, market cap, and volume. We shall also summarize the predictions of the world’s most popular and reliable analysts, besides the Fear & Greed Index to assess future projections.
Solana’s price, market Cap, and other metrics
After an extremely successful performance last year, the cryptocurrency market began tumbling in 2022. From around $178 in early January, SOL’s price fell to as low as below $80 in mid-March. In early April, it breached the $135-mark before again continuing to fall lower and lower. At press time, SOL was trading at just under $32, with the same underlining a fall of around 75% in 7 months.
By the end of 2020, the market cap of Solana was only a little over $70 million. 2021 proved to be a dream run for the currency as its market cap continued to soar higher and higher, climbing as high as $77.99 billion on 6 November. When 2022 began, its market cap was $55.19 billion, following which it hit a low of $25.49 billion on 13 March.
Market conditions got better in April, briefly, before it plummeted yet again.
Messari’s James Trautman recently published a report that analyzed the state of Solana in the second quarter of 2022. With volatility prevalent across metrics in Q1, Solana completely crashed, in line with all the other cryptocurrencies in Q2. The macroeconomic conditions worsened for the industry as tighter regulations kept coming into place and we witnessed the $60 billion collapse of terraUSD and LUNA.
Revenue decreased by 44.4% due to bad network performance, and average transaction fees, in turn, decreased by 40.6%. In Q2, its P/S ratio was 847x. In comparison to Q1, its TVL also decreased by around 68%, similar to a ~70% fall in TVL across all the top 10 DeFi protocols.
The report also mentioned that Solana is one of the leading blockchains when it comes to NFT transactions. Currently, it is home to Solanart, Metaplex, and Magic Eden, among several other NFT marketplaces. Therefore, a rise in this asset class could conversely affect the price and volume of its native cryptocurrency as well.
Solana Price Prediction 2025
We must understand that experts’ predictions vary a lot. Each analyst weighs upon a specific set of factors to forecast the market and different currency metrics. These analysts study the previous market trends as well as future speculations and then arrive at their predictions. It is therefore self-evident that market predictions significantly vary. Even then, unexpected technological and economic changes keep interrupting the market wildly, thereby influencing currency metrics.
Let us now look at what different crypto analysts have to say about Solana’s future in 2025.
A Changelly blogpost claimed that the maximum and minimum prices of Solana in 2025 will be $213.55 and $174.43, respectively. On average, it will trade at around $179.57 in 2025, it added, with SOL’s potential ROI predicted to be 441%.
Finder’s panel of experts…