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Why Solana doubled in price in 40 days

02 Nov, 2023
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Since October, Solana's price has doubled to $42 per coin, reaching a market capitalisation of $17.5 billion. SOL is fourth in the overall altcoin rating (excluding stablecoins) and second in terms of daily trading volume.

Image source: coinmarketcap.com

Solana is the top altcoin in terms of investment volume in crypto funds due to high interest among institutional investors. Over the past 12 months, $98 million has been invested in Solana funds, while $125 million has been withdrawn from Ethereum funds.

Image source: coinshares.com

Back in August, we talked about the coin having growth prospects as the project continues to grow its business connections. The Solana Pay service was first added by e-commerce giant Shopify, and later, it was revealed that Visa was using the blockchain for faster and cheaper transactions in interbank exchanges.

Image source: vaneck.com

In late October, interest in Solana was fuelled by a report from investment firm VanEck, which has $76 billion under management. The report detailed that the base case scenario sees the coin rising to $335 and that the bullish scenario forecasts growth to $3,211 by 2030.

Image source: StormGain cryptocurrency exchange

According to VanEck analysts, Solana has a better chance than other blockchains of creating a "killer app" with over 100 million active users. Both the highest bandwidth and ultra-low transaction fees contribute to this.

Image source: vaneck.com

A significant gap from competitors will be provided by the new Firedancer validator client, which is currently undergoing testing and is expected to be deployed in the first half of 2024. According to Solana Founder Anatoly Yakovenko, Firedancer will be a cure for the "curse" manifested in frequent network failures. Last year, they occurred on average every two months, and in February 2023, the network was down for 19 hours.

Image source: status.solana.com

But Solana's prospects aren't that sunny. First, the sale of $2 billion worth of SOL from the accounts of the bankrupt FTX began. The liquidator announced a limit of $100 million per month in order not to negatively impact the price. Second, VanEck recognises that because Solana's architecture is so complex, implementing Firedancer doesn't guarantee that there won't be any critical bugs in the future.


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