Over time, there have been substantial changes in the cryptocurrency market. This time, it was purely conjectural and continued into 2022 and early 2023. A good example of this pattern is Solana (CRYPTO: SOL), which reached a peak of over $250 per token before plummeting below $10 following the failure of FTX. For those who see cryptocurrencies as more than just speculative investments, Solana is a solid, if risky, long-term hold because, despite the volatility, it is still one of the cheapest and fastest blockchains to execute transactions on a large scale.
Developer and User Activity
The activity of developers and users is a pulse on the health of any given blockchain. In addition, Solana consistently reports having 2,500–3,000 active developers outside of Ethereum, with the old news still topping over 6,000. Furthermore, Solana is far more capable of handling 3K–4K transactions per second as opposed to Ethereum’s meager 13 t/s. Booming engagement and activity are key markers of a healthy, fulfilling life with more potential for growth.
ETFs and Cryptocurrency Investing’s Future
Analysts have characterized the Securities and Exchange Commission’s recent approval of spot Bitcoin exchange-traded funds (ETFs) as a catalyst for increased investment in the cryptocurrency space. The same has happened with Ethereum, and it might have happened with other cryptocurrencies like Solana. Although Solana may not be as widely used as Bitcoin or as valuable as digital gold, its high-performing blockchain and usefulness will undoubtedly make it an asset in and of itself, especially given the strong demand from consumers and institutions.
Solana’s Difficulties
Where it may fall short In that concept, this has a couple of potential downsides for Solana: the big one is Ethereum runs on its own blockchain native currency (Ether) and SOL plays an essential function in their specific ecosystems. Most transactions on Solana are actually done in the USDC stablecoin rather than using Sol. This may also thwart the upside of the cryptocurrency. In the future, it may be that a USDC-demominated or some other fiat-pegged token will emerge as more important than Solana’s native cryptocurrency.
Long-term Potential
But Solana has great activity and innovation, which is why it could be a successful blockchain despite those setbacks. Solana boasts one of the highest rates of development and transaction content across all blockchains, reaffirming its potential for financial transactions in tomorrow’s world. This is very bullish for Solana’s long-term perspective because activity like this points to an existential future.
Conclusion
It is certainly still possible to invest in Solana, given the amount of innovation on the blockchain. Strong developer and user engagement coupled with real-world application-driven growth potential provides for an investment worth considering among the long-term investors. But in true Motley Fool fashion, those aren’t the only stocks for your return-generating efforts, as recommended by our Mission 2: The Moon Stock Advisor team.
