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Investor demand for Solana sets new records

21 Nov, 2023
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Interest in Solana has reached historic levels, surpassing the September 2021 record of 4.3%. Solana now accounts for 5.5% of total crypto turnover, which translates to $23.8bn each month.

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There is increased interest from both traders and institutional investors. Over the last 12 months, institutional investors have poured $121 million into the coin. Solana has overtaken all altcoins combined both in terms of volumes and the annualised rate of capital inflows into exchange-traded funds.

Image source: coinshares.com

Traders set an all-time record for the volume of open interest on the derivatives market – hitting $834m on 16 November. The previous record stood at $811, recorded in October 2021.

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Off the back of such strong investment demand, Solana has grown six-fold to $60 in 2023.

Image source: StormGain cryptocurrency exchange

The influx of capital is being driven by significant progress in the promotion of the blockchain: the Solana Pay payment gateway was added to Shopify's e-commerce platform, and VISA is pioneering the network as an interbank exchange tool. In both cases, we are talking about transactions being carried out in USD Coin (USDC). The list of supported coins may be expanded at a later date.

The fact that such large players have chosen Solana is explained by a high degree of decentralisation coupled with ultra-low commissions (less than $0.01) and high transaction completion speeds (up to 2 seconds).

Image source: vaneck.com

According to Solana co-founder Anatoly Yakovenko, the real "curse" for the network was the number of frequent failures it experienced, which often resulted in a complete loss of functionality. However, Solana has been running smoothly since March, and a future update to the Solana blockchain's validator, Firedancer, will probably solve this problem completely.

Investment firm VanEck optimistically estimates that Solana will hit $3,211 by 2030. The baseline scenario assumes growth to $335.


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