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Launched in in 2020, Solana promised a ‘leap forward’ in the development of blockchain technology, with ‘unparalleled transaction speeds’ and a vision for a ‘more scalable and efficient future’.
However, the Solana blockchain and its native token (SOL) have experienced both periods of catastrophe and success over the past three years, as it has sought to carve out its niche in the digital asset space and mark its place as a rival to Ethereum. But what could the future look like for Solana? We ask the experts and weigh up both the ‘bull’ and ‘bear’ cases.
Related: How to Buy Solana
Forbes Advisor has provided this content for educational reasons only and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or in any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.
Solana’s price history
Solana first went public via its initial coin offering (ICO) in April 2020, entering the crypto market at an initial price of £0.59.
It garnered attention for its innovative technology, promising a ‘scalable solution’ for decentralised applications. Its potential at least was not unnoticed, as the price of Solana reached an all-time high of £191.72 on 7 November, 2021.
However, the volatile nature of cryptocurrency markets soon left their mark and by 2022 the value of the SOL token had declined by over 90% compared to 2021.
But Solana once again rebounded. The last quarter of 2023 and the beginning of 2024 marked a significant turnaround for the coin, pushing up its price to around £158 in March 2024.
Cheif executive of CoinJar, Asher Tan, told Forbes Advisor: “This turnaround can be attributed to several factors, not least of which was the platform’s almost full-year of network uptime. After a series of outages plaguing Solana, causing frustration among users and investors alike, the network has stabilised.”
However, as with any cryptocurrency, Solana is highly volatile, as our 5-year performance chart below demonstrates.
Solana’s 5-year price history
How might Solana perform in 2024?
No matter how thorough the analysis, cryptocurrency prices cannot be accurately predicted. Anyone who invests in crypto assets must be prepared to lose their entire investment.
Some commentators believe that Solana’s trajectory for the year ahead appears optimistic as there are plenty of opportunities for advancements. One example could be its growing dominance in the decentralised finance (DeFi) and non-fungible token (NFT) sectors.
“Volumes in decentralised exchanges (DEX), NFT trading, and stablecoins on Solana have started to rival or have overtaken those on Ethereum,” says Tan.
Solana’s ability to match or even surpass Ethereum in these critical aspects of the blockchain economy could indicate a robust and scalable infrastructure which is capable of handling significant transaction volumes – a crucial factor for any further growth.
Solana’s aggressive foray into the NFT market has not gone unnoticed, either. “In the NFT segment, despite heavy competition from Bitcoin’s Ordinals and the incumbent Ethereum, Solana has closed the gap on both chains,” Tan adds.
Over the past few months, some active Solana users have also received ‘airdrops’ from multiple projects, most notably, users of Jito and Jupiter Exchange, worth as much as £8,000.
These efforts have been pivotal in drawing in more capital, further fuelling the ecosystem, Tan adds.
What could the future hold for Solana?
As we explore the future prospects of Solana, it’s imperative to balance our perspective by considering both the bullish and bearish viewpoints:
The bull case
Like many up and coming blockchain platforms, Solana’s perceived success is often viewed through the lens of its comparison to Ethereum, which leads the category for blockchain smart contract platforms.
“Ethereum’s dominance and market share are not purely from being the first mover. Savvy governance has made it the platform of opportunity, largely powering the ICO wave in 2017-18 and much of the memecoin action in 2020-21,” Tan says.
“[Ethereum] provided a template for success; lower barriers to entry and a thriving developer community are key ecosystem elements to capture the imagination and drive the price.”
So far, Solana has managed to emulate Ethereum’s “template for success” in many ways, which is now reflected in its ecosystem of innovative projects, meme coins, community engagement and active developers.
This replication of Ethereum’s success formula – lowering barriers to entry and fostering a thriving community – could suggest a bullish outlook for Solana within the competitive blockchain space.
The bear case
However, it’s crucial to consider the challenges and trade-offs that have accompanied Solana’s growth. When considering the blockchain ‘trilemma’, which refers to the challenge of achieving a balance between scalability, security, and decentralisation in a blockchain network, it is clear that Solana has sacrificed decentralisation for scalability.
“Despite architecture decisions that have seen trade-offs in decentralisation and, at times, stability, Solana’s compromises have so far worked in their favour,” Tan says.
Tan explains that these concessions, while helping it to reach a larger audience with cheaper fees and lower barriers to entry for users, “ultimately rest on the premise that a Layer-1 blockchain is the solution the market needs”.
The proliferation of Layer-2 solutions on Ethereum addresses many of the criticisms levelled against Ethereum’s scalability and throughput, offering a counterpoint to the necessity of Layer-1 solutions like Solana.
Furthermore, Ethereum’s successful transition to Proof-of-Stake, known as ‘The Merge,’ exemplifies its ability to overcome significant challenges.
“While Ethereum has managed to navigate difficult engineering and public perception challenges like ‘The Merge’ to Proof-of-Stake, Solana’s relatively short operating history has yet to see its leadership tested in the same manner,” Tan says.
Uncertainties surround Solana’s capacity to navigate future challenges, particularly in an environment where its architectural compromises could be tested against the evolving demands of the blockchain market.
The future outlook for Solana contains both promise and potential hurdles. The bullish case rests on its demonstrated ability to captivate the market’s imagination and emulate aspects of Ethereum’s successful growth strategy. Conversely, the bearish perspective raises important questions about the sustainability of its architectural choices and untested leadership in the face of potential challenges.
Could Solana be a good investment?
The investment potential of Solana is a topic of considerable debate within the cryptocurrency community. With its innovative technology and active ecosystem, Solana has captured the attention of investors looking for the next big opportunity in the blockchain space. As Tan notes, Solana’s cutting-edge technology and the optimism of its community are central to its identity and appeal.
“In a cyclical industry that is easily influenced by novelty, Solana has bags of it,” Tan says.
“Still, a lot of gains over the past year have been from cannibalising off other chains’ weaknesses.” While effective in the short term, this strategy raises questions about Solana’s long-term sustainability and ability to forge a distinct and enduring position in the market.
The critical challenge for Solana, Tan adds, is its ability to shape the narrative of future technological cycles. For Solana to truly usurp Ethereum or any other leading platform, it must become the birthplace of groundbreaking decentralised applications that capture the market’s imagination and drive widespread adoption.
Determining whether Solana is a good investment depends on several factors, including one’s appetite for risk, investment horizon, and belief in the platform’s technological and market potential.
While Solana presents a compelling case with its innovative features and community enthusiasm, investors must also weigh its challenges in achieving long-term dominance.
As with any investment in the volatile cryptocurrency market, thorough research is critical and speaking with a financial advisor before making a decision is always recommended.
Cryptocurrency is unregulated in the UK. The UK regulator, the Financial Conduct Authority, has repeatedly warned investors that they risk losing all their money if they buy cryptocurrency, with no possibility of compensation.
Frequently Asked Questions (FAQs)
How do investors buy SOL?
Purchasing Solana (SOL) is a straightforward process, accessible through various cryptocurrency exchanges.
To start, investors need to create an account on a reputable exchange that lists SOL, such as eToro or Uphold.
After identity verification (a standard compliance step to ensure security and prevent fraud) one can deposit fiat currency into the account.
Once funds are deposited, the user can navigate to the SOL market on the exchange, to place an order to buy SOL at either the current market price or a specified limit price.
How much might Solana be worth in 2025?
Predicting the exact price of Solana (SOL) in 2025 is challenging due to the highly volatile and unpredictable nature of the cryptocurrency market.
Factors such as technological advancements within the Solana ecosystem, changes in regulatory environments, market sentiment, and broader economic conditions can all significantly impact Solana’s future value.
Analysts and experts may offer predictions based on current trends and historical data, but it’s essential to approach these forecasts cautiously and conduct thorough research before making investment decisions.
It is always wise to consult a financial advisor before making an investment decision.
