The crypto rally that started last October brought significant relief to Solana investors, as the project faced huge problems during the FTX crash in late 2022.
At the start of October 2023, Solana traded below $25. In recent days, the coin made an attempt to settle above the $200 level — an impressive growth in just six months!
As a result, Solana competes with BNB for the title of the world’s fourth coin by market cap. BTC, ETH, and USDT, whose market cap has recently exceeded $100 billion, are the only coins bigger than SOL and BNB.
Let’s take a look at the key catalysts behind SOL’s strong rally:
— The coin survived the collapse of FTX. Fears about Solana’s viability have come to an end, although the coin lacked positive drivers for many months.
— The beginning of the rally in crypto markets, which was triggered by expectations of spot Bitcoin ETFs, boosted demand for all major coins, including SOL.
— As it became clear that the SEC would approve spot Bitcoin ETFs, some traders were willing to bet on the upcoming ETFs for BTC and SOL.
— There’s a significant difference in market cap between ETH and SOL. Many projects use the Solana blockchain. If SOL usage grows, it can take market share from ETH and close the market cap gap.
— Dogwifhat (WIF), the popular newcomer in the world of dog coins, runs on the Solana blockchain.
There are many reasons for SOL’s rally, but investors should also take a look at several risk factors:
— Spot Solana ETF won’t come in the near future. SEC has already started to delay the approval of spot Ethereum ETFs. The spot Bitcoin ETF approval drama showed that the regulator would wait months before approving the products.
— Meme coins are extremely volatile, so it’s too early to tell whether WIF (or some other meme coin) would boost the usage of Solana blockchain in the long term.
Bottom line: Solana survived the bear market despite all problems and continues to move forward. It’s certainly a coin worth monitoring.