It’s not a Bitcoin (BTC-USD) killer or an Ethereum (ETH-USD) killer. Yet, Solana (SOL-USD) does have properties that set it apart from other cryptocurrencies. After learning as much as you can about Solana, you may be tempted to dip in with a small, long-term position.
However, be prepared for the SOL-USD price to make big moves in either direction. As we’ll see, one financial firm envisions a very wide potential price range for Solana. So, put on your seat belt as we delve into the details and find out what’s so special about Solana.
Solana: Pushing the Envelope With Speed and Efficiency
What sets Solana apart from ultra-popular Bitcoin and Ethereum? As Solana’s official website explains, the Solana network is “engineered for widespread, mainstream use by being energy efficient, lightning fast, and extremely inexpensive.” It’s also touted as being scalable, meaning that it has the “ability to grow.”
Believe it or not, the average transaction cost for Solana is just $0.00025. Solana is lightning-fast with block times of 400 milliseconds and, as of Jan. 22, speeds of 2,663 transactions per second.
Again, Solana shouldn’t be considered an Ethereum killer. Yet, InvestorPlace contributor Omor Ibne Ehsan brought up a notable point. “If Ethereum gets clogged in 2024’s bull market rally, developers and liquidity could readily migrate to faster alternatives like Solana,” Ehsan considered.
In addition, the Solana network is ideal for producing non-fungible tokens. As of Jan. 22, 21.9 million NFTs had been minted on the Solana network. This is another consideration that could make Solana more interesting than many other cryptocurrencies.
No Middle Ground for Solana
If Solana sounds intriguing to you, that’s understandable, but don’t mortgage your house to buy it. The key here is moderation, as the SOL-USD price is quite volatile and could either soar or plummet.
More or less, following the trajectory of Bitcoin, Solana recently spiked above $120 but then pulled back to $87. This presents a dip-buying opportunity, but don’t make a move until you’ve heard what VanEck analysts/strategists Patrick Bush and Matthew Sigel have to say.
Bush and Sigel wrote, “By 2030, our Solana valuation scenarios project a SOL price ranging from a bearish $9.81 to a bullish $3,211.28.” This prediction range is “anchored by varied market shares and revenue estimations across key sectors.”
Their prediction involves a “scenario in which Solana is the first blockchain to host an application that onboards 100M+ users.”
Of course, there’s no guarantee that this will actually occur, so consider it a bullish proposition.
But then, it’s also not an impossible scenario. Optimistically, Bush and Sigel “see a credible path to $8B in revenues for SOL token holders by 2030.” It’s a possibility worth considering, but not betting your life savings on.
Solana: Dare to Dream, but Stay Grounded
Doing the math, it looks like Solana could rally by nearly 3,600% if it rises from $87 to $3,211.28. However, that’s at the extreme upper boundary of Bush and Sigel’s forecast range.
The lower end of that range suggests that the SOL-USD price could drop to just $9.81. To prepare for this possibility, it’s wise to maintain a very small stake in Solana. That way, you’ll be positioned for glory but also won’t get hurt too badly if Solana crashes and burns.
On the date of publication, David Moadel 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.
