- The increase in the number of investors who have adopted the digital currency, as well as the new projects and the improvement of the outlook, have led Solana to gain 5,970% during 2021.
While the cryptocurrency market was down for several weeks, August has been a favorable month for the world’s major digital currencies. The market has managed to hit general highs, spotlighting the progress of one cryptocurrency in particular: Solana (SOL).
This token closed the month with gains of over 210%, accumulating an appreciation of 5,970% so far this year. In this way, SOL is among the 5 coins with the highest increases during 2021 when comparing its performance within the basket of 100 largest cryptocurrencies in the world.
Its current price is around 117,000 dollars and during the last week it had a spectacular performance by climbing 55% in the market. As a result, Solana ranks among the top eight largest cryptocurrencies in the world by market value. What explains such a drastic appreciation in such a short time?
Confidence and Optimism in the Project
What is perceived by the market is a high optimism regarding the Solana project and a positive news persona that has attracted the growing attention of institutional investors.
The cryptocurrency, launched in March 2020, is seen as a rival to Bitcoin and the Ethereum network. Solana has already incorporated smart contract integration into its system and has a much more scalable network than Ethereum itself.
Solana has set the goal of improving network scalability through the introduction of a Proof-of-History (PoH) consensus, which is combined with a Proof-of-Stake (PoS) consensus. Such a union is what has caught the attention of institutional and individual investors.
Why Are Investors Bullish on Solana?
Solana has managed to position itself well in the market to attract the non-fungible token (NFT) frenzy. Two weeks ago, the network jumped into this space by launching the Degenerate Ape Academy collection, which features some 10,000 exclusive images of cartoon apes.
The result was immediate with all the works being sold in 10 minutes. This movement boosted the listing of the SOL token because to bid on the NFTs it was necessary to have previously acquired the crypto active. The rally was expected to experience its respective correction later but the coin has maintained its price.
A few days ago, Nasdaq analysts noted that “Solana’s recent earnings appear to be fueled by excitement around decentralized finance initiatives, or DeFi, and the recent announcement of a mystery event from the cryptocurrency development team.”
They were referring to the “Ignition” event that Solana was promoting through her networks. It is a virtual hackathon that started on August 31 and will remain open until August 27. On the other hand, institutional interest in the network has grown enormously.
The digital asset manager Osprey Funds has expressed its intention in recent days to launch an investment fund focused on Solana. To do this, it registered the Osprey Solana Trust with the US Securities and Exchange Commission (SEC). This move is expected to lead to more exposure for Solana among big Wall Street investors.
Similarly, Pyth Network, the decentralized data firm, announced that it had chosen the Solana blockchain to launch its solutions. The project seeks to track market performance in real time and integrate with DeFi applications through Solana’s Wormholen sidechain.
On The Flipside
- One of Solana’s backers is the founder and CEO of exchange trading platform FTX, Sam Bankman-Fried, who built a decentralized exchange called Project Serum (SRM), which operates on the Solana blockchain.
Why You Should Care?
The optimism put into the Solana project is not so new. In June the cryptocurrency managed to raise just over $300 million earmarked for the launch of the incubation study to accelerate the development of decentralized applications (dapps) and platforms built on blockchain.
The specialist and creator of the University of Bitcoin, Rodrigo Miranda, has mentioned Solana as one of the five cryptocurrencies to consider this year to expand the investment portfolio. He claims that the token has the advantage of having a fast network, low fees, and its own blockchain.