I recently got an unsolicited email from a public relations professional that suggested Solana (CCC:SOL-USD) would hit $1,178 by the end of 2025.
According to Finder.com’s Solana’s price predictions report — it surveyed 50 fintech specialists, including Thomson Reuters (NYSE:TRI) futurist Joseph Raczynski — and also found that SOL-USD could hit $5,056.82 by the end of 2030.
So, if you buy now and hold Solana until the end of 2030, you’re looking at a cumulative return of 1,998%. That’s a compound annual growth rate of 40.2%.
Given some of the returns of cryptocurrencies in recent years, 40.2% seems like an insult. But, of course, we know it’s not. For example, a $10,000 investment today would be worth $209,282 at the end of 2030.
I’ll take that every day of the week. You know the rest of the saying.
Are you ready to jump on the Solana bandwagon? Here are the pros and cons of doing so.
The Pros of a 9-Year Solana Hold
Before we can get to 2030, we still have to get through 2021. In mid-August, Solana was only trading around $45. It’s up 436% in three months. That’s an annualized return of 1,744% [436% divided by 3 multiplied by 12).
It’s been hotter than a pistol.
According to DigitalX Ltd.’s Alex Nagorskii, “Solana has been enjoying spectacular growth this year, buoyed by strong features such as exceptionally high transaction speed. It has been able to ride the success of some NFT projects launched on their blockchain.”
“Until Ethereum solves their issues with scalability, it is likely Solana will continue to perform strongly. However, as shown by the DDoS attack, it is yet to nail down the Security aspect of its network.”
InvestorPlace’s Ian Bezek recommended buying SOL-USD in late September after it dipped due to the security breach mentioned above.
“On September 14, the Solana network had a massive service failure. Solana was unable to complete transactions for 17 hours. While no funds were lost, it was a major blow to confidence in the Solana community, and the price of SOL dropped as much as 15% during the network outage,” Bezek wrote on Sep. 30.
In the six weeks since Bezek’s call, Solana’s price has jumped by 73%. An excellent call by my colleague.
In the weeks and months ahead, the people behind Solana will work diligently to ensure the type of thing that happened in September doesn’t happen again. But, as my colleague points out, if the worst thing about it is that it needs to improve its network capacity, Solana’s future outlook appears bright.
$5,000, here we come.
The Cons of Buying for the Long Term
As anyone who follows cryptocurrencies knows, volatility is the name of the game. Up today, down tomorrow. Buying SOL-USD for nine years will take an incredible amount of patience and risk tolerance.
And while the payoffs might be multi-generational wealth, it could also be long-term financial ruin if you don’t play your cards right. Solana’s transaction fees might be cheap at double the price — its site says .00025 average cost per transaction — but if you value security over everything else, this might not be the blockchain network to bet the farm on.
Reddit co-founder Alexis Ohanian recently announced that his Seven Seven Six venture capital firm would invest $100 million alongside Solana Labs’ venture capital arm in decentralized social media projects.
“With a high performance blockchain like Solana, there is an unprecedented opportunity to fuse social and crypto in a way that feels like a [Web 2] social product but with the added incentive of empowering users with real ownership,” Ohanian said in a statement.
On the one hand, I get where the Reddit co-founder is coming from. Sure, I might do it if I could be paid to post comments about my life. For a while. But then I’d grow bored, or trolls would chase me away.
On the other hand, social media doesn’t have the best reputation at the moment. They’re all struggling to generate revenue from advertisers without trampling on users’ privacy. So who can say a decentralized version will be any better.
A lot can happen in nine years. Some of it will be good. Some of it won’t be good. So we know it will be volatile.
The Bottom Line
In July, I stated that Solana was providing significant utility in its decentralized finance (DeFi) DApps. It continues to contribute to more than 300 projects to advance the cause.
I think a case can be made to own both Solana and Cardano (CCC:ADA-USD) because they both provide the kind of utility that most other cryptos fail to deliver.
And who knows, in nine years, maybe SOL-USD will be worth more than $5,000.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.