Smart-contracts platform Solana (SOL-USD) is down over 45% since the start January. Yet, the slide in price began after SOL-USD hit an all-time-high (ATH) of $260 in early November 2020.
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At the end of 2020, Solana was around $1.51. Now, the altcoin is changing hands around $90. Thus, the run-up in SOL-USD price in a little over a year means a return of 5,900%. Put another way, despite the decline in the past three months, the proverbial $1,000 invested in SOL-USD in January 2021 would now be worth around $60,000.
2022 has so far meant a bear market in the crypto space. Year-to-date (YTD), we have also seen Bitcoin (BTC-USD), Ethereum (ETH-USD), and Cardano (ADA-USD) decline by 20%, 29%, and 32%, respectively. Investors now wonder whether Solana can reach $200 again any time soon.
Given the volatility in broader markets as well digital currencies, it is not easy to make short-term price projections. However, investors with a two- to three- year horizon could consider a small SOL-USD allocation in their portfolios.
Here’s why.
Smart-Contract Projects Moving to Solana
With a market capitalization (cap) of $28.9 billion, Solana is among the top 10 cryptos. Therefore, it gets significant investor attention. But more importantly, it has become an important competitor to Ethereum, the largest smart-contract crypto.
International Business Machines (NYSE:IBM) highlights that smart contracts “are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss.” Among the benefits of smart contracts are: “Speed, efficiency and accuracy… Trust and transparency… Security… Savings…”
Therefore, platforms such as Ethereum and Solana have been attracting decentralized finance (DeFi) projects. Recent academic research points out, “In functionality, Solana resembles Ethereum, and most of the applications…
