Should one Buy, Sell, or Hold Solana?
The Solana (SOL 4.50%) digital currency has been on a rollercoaster journey since its launch in the spring of 2020. Initially trading for less than a buck per coin, it shot up to a mind-boggling $259 during the 2021 cryptocurrency boom, only to plummet back below the $10 mark in December 2022. However, it's been following in the footsteps of Bitcoin (BTC 1.53%) quite closely in 2024, mirroring its movements almost perfectly. On December 18, 2024, a Solana coin was worth a cool $202.
Fast forward to present day, and it's time to look ahead to 2025 and beyond. Is Solana a worthwhile investment, an overvalued sell, or a reasonably priced coin you should hold if you already own it?
Solana's bumpy past
The dramatic price swings over the years can be traced back to a few key events. For instance, when the FTX crypto-trading platform collapsed spectacularly, it held a significant amount of Solana tokens. This contributed to a loss of investor trust in Solana, which wasn't helped by the scandal being unveiled during a period of inflation and a cryptocurrency winter.
Rebuilding that damaged investor trust took time, but Solana managed to do so by offering valuable features that attracted many app developers. The cryptocurrency can process smart contracts just like Ethereum (ETH 1.18%), but it does so faster and at lower fees. This made it an attractive choice for developers, helping Solana recover from the FTX-induced winter.
In fact, developer interest reached a turning point about a year ago, leading to a massive increase in transaction volumes and usage fees. There was a brief slowdown over the summer, but this was followed by another surge in Solana usage and a consistent boost to the average daily transaction count.
Solana's future ambitions
Often viewed as a potential "Ethereum killer," Solana can handle a lot of smart contract projects. The Solana Foundation sees the coin as a key player in the upcoming Web3 vision, where individuals have more control over the internet experience than social media operators.
Rather than trying to replace Ethereum, Solana's backers aim to win a significant share of the next-generation app market in a fierce competition against Ethereum and others.
The usage statistics suggest that Solana is well on its way to a successful future. There are plenty of high-performance cryptocurrencies around today, and even Ethereum has improved its execution speed recently. However, Solana's platform offers a proven combination of speed, security, and a supportive developer community.
Final verdict: You might want to buy Solana now
This digital currency is here to stay. Solana has already built a strong user community and a substantial market presence. According to CoinMarketCap data, Solana is the sixth most valuable cryptocurrency today, with a market cap of $99 billion. That's similar to the market caps of well-known companies like Starbucks and Altria.
Solana's price has doubled this year, but it's lagging behind Bitcoin in recent weeks. Investors are moving away from risky high-growth assets at the moment due to concerns about the AI boom and inflation. However, these bearish sentiments are likely to be temporary, and many crypto investors expect leading cryptocurrencies to continue rising in 2025. Additionally, web3 ideas are gaining traction every day, and Solana should benefit if these ideas translate into popular apps.
In conclusion, Solana merits your attention, unless you believe that cryptocurrencies are fundamentally worthless. If you're convinced of this, you probably wouldn't be reading this far, so I suggest taking a closer look at Solana's technical features and its role in the cryptocurrency ecosystem. These insights might inspire you to invest in Solana.
Given Solana's strong market presence and potential in the upcoming Web3 vision, some investors might consider it as a promising opportunity for investment. As the sixth most valuable cryptocurrency with a market cap similar to well-known companies, Solana could potentially yield significant returns if its role in the cryptocurrency ecosystem and the growth of web3 ideas are realized.
In light of the current bearish sentiments towards risky high-growth assets and concerns about the AI boom and inflation, investors might be hesitant to invest in Solana at the moment. However, many predict a recovery and continued rise in the value of leading cryptocurrencies, including Solana, in 2025. Therefore, investors might want to consider buying Solana now as a potential long-term investment, provided they believe in its value and potential in the cryptocurrency market.
