Solana, hailed for its high-speed transactions and low fees, has continued to maintain its position as a strong competitor to the largest smart contracts platform Ethereum and a formidable player in the broader cryptocurrency scene.
Solana has not only emerged as the leading blockchain ecosystem so far in 2024, but its native token SOL has also attracted increased interest from both retail and institutional investors amidst the impending crypto bull market. What price levels can SOL attain this year?
The current state of Solana
From total value locked (TVL) and revenue to the number of transactions and active addresses on the proof-of-stake (PoS) blockchain network, Solana has recorded laudable growth so far in 2024.
At the time of writing, Solana ranks as the second-largest blockchain in terms of decentralized exchanges (DEXs) volumes per data on the popular on-chain analytic platform DefiLlama. While Ethereum remains the leader in the decentralized finance (DeFi) market, DefiLlama showed that Solana surpassed Ethereum on July 13 in terms of DEXs daily market share by 12.87%.
Of the estimated $97.5 billion in TVL across all DeFi protocols and ecosystems as of July 2024, Solana accounts for roughly $5billion, placing it as the third-largest blockchain by TVL. Ethereum and Tron account for approximately $60B and $8.2B of the overall DeFi market TVL, respectively.
The Solana network has continued to record significant daily active addresses and transactions this year. On July 19, active addresses and transactions on the network rose to 1.12 million and 40.88 million, respectively, signaling increasing adoption. So far in 2024, the highest number of daily transactions was recorded on January 11 — over 231 million transactions, according to data on DefiLlama.
Solana has also seen significant growth in network revenue in 2024, recording a revenue of $858,423 on July 19. This translates to an increase of over 395% from its revenue of $173.16K on December 31 2023. On March 18, Solana’s daily revenue reached $2.47 million, marking the network’s highest earnings so far this year.
It bears mentioning that Ethereum netted a huge revenue in the first quarter (Q1) of 2024 to the tune of $365 million. Accordingly, several analysts have predicted the blockchain to reach $1 billion in annualized income in 2024.
Read also: Solana and Its Ecosystem: Blockchain, Token, and Projects
Key factors behind Solana’s growth
The impressive growth of Solana in 2024 can be attributed to many factors, including the potential launch of Solana exchange-traded funds (ETFs) in the U.S., which could result in the flow of venture capital into SOL and other ecosystem tokens. The surge in network activity, memecoin frenzy and a rise in Solana-based DeFi protocols are other key factors.
- Spot Solana ETF buzz
Similar to the earlier approved Bitcoin ETFs, Solana ETFs may be on the horizon following applications from global asset managers. Of course, that would be a highly positive development for the crypto project, which could cause an exponential increase in the price of SOL.
On June 27, leading asset manager VanEck became the first institutional crypto player to file for a spot SOL ETF in the United States as it pushes to expand its crypto-related suite of offerings. According to the Form S-1 filing with the U.S. Securities and Exchange Commission (SEC), the so-called VanEck Solana Trust, will track the price of SOL in the spot market.
The document further stressed that “Neither the Trust nor the Sponsor, the SOL Custodian, or any other person associated with the Trust will, directly or indirectly, engage in any action where any portion of the Trust’s SOL is used to earn staking rewards, to earn additional SOL or to generate income or other earnings.” If approved, VanEck’s Solana ETF Trust will be traded on the Chicago Board Options Exchange (CBOE) BZX platform.
Similarly, another BTC ETF issuer 21Shares submitted a Form S-1 application with the U.S SEC on June 28 to launch a spot SOL ETF dubbed “21Shares Core Solana ETF.” Further indicating high institutional interest in SOL, CBOE filed two Form 19b-4 applications on July 8, one for the 21Shares Core Solana ETF and another for the VanEck Solana Trust. However, the SEC’s response to the emerging SOL ETF bids is expected sometime around March 2025.
- Solana memecoin mania
Thanks to low transaction fees and ease of creating tokens on the Solana network, a significant part of the blockchain ecosystem comprises memecoins. Regardless of being high-risk investments, memecoins trading accounts for a significant proportion of activities on the Solana network and contributes to the increasing demand for SOL tokens. They also boost liquidity in the Solana ecosystem.
Notable Solana SPL meme tokens are Dogwifhat (WIF), BONK and POPCAT, which achieved peak market capitalizations of approximately $4.6 billion, $2.8 billion, and $909 million, respectively.
Read also: Understanding the Pros and Cons of Memecoins as an Investor
- Booming Solana-based DeFi protocols
The rise of several Solana-based DeFi protocols is another major driving force behind SOL’s impressive performance so far in 2024. Courtesy of their outstanding features, solutions as well as airdrop campaigns, protocols such as Jito, Marinade, Kamino, Raydium, Sanctum, and Jupiter have been at the forefront of Solana’s continued growth.
According to DefiLlama, liquid staking protocol Jito boasts a TVL of over $2B. Marinade, Kamino and Raydium all record TVL growth of over $1B. Other top Solana protocols by TVL are Sanctum ($931M), Jupiter Perpetual Exchange ($527M) and MarginFi ($445M).
Read also: How to Analyze DeFi Projects
How far can the SOL price rally in the looming bull run?
Trading at $169 at the time of writing, SOL has surged over 20% in the past seven and 30 days, indicating increasing accumulation. Up over 4.3% in the last 24 hours per Coingecko data, Solana traders are now chasing the $180 near-resistance level.
Should this level be flipped, SOL could be trading above $200 in the coming weeks or months, setting the $259 price level as the next major resistance for traders. But there is no guarantee as the upcoming Mt. Gox $9B repayment in BTC and BCH could cause a massive correction in the crypto market.
Factoring in metrics such as increasing network activity across Solana DeFi ecosystems, memecoins frenzy, ETF buzz, and broader crypto market bullish sentiments, it’s safe to say that SOL has what it takes to reach a new all-time high above $259 in the coming bull run. As a general rule of thumb, caution is always required when dealing with crypto assets as they are subject to high volatility.
Read also: What is really behind Solana’s emergence as the leading blockchain ecosystem in 2024
Credit: Ndianabasi Tom A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).
