In the fast-evolving world of cryptocurrencies, Solana has emerged as a standout performer, showing a remarkable 24% increase in value over the past month. Matt Hougan, the Chief Investment Officer at Bitwise, suggests that this uptick may just be a precursor to an unprecedented run towards the end of the year. He emphasizes that the formula for achieving strong returns in the crypto space has been straightforward for the last year and a half: a combination of exchange-traded product (ETP) inflows and significant corporate treasury investments.
Hougan points out that this “recipe” has previously propelled Bitcoin from a value of $40,000 to its current standings, and helped Ether to triple in price. He argues that a similar dynamic is beginning to develop around Solana (SOL).
A significant development supporting this narrative is the recent filing by seven major asset management firms—including Bitwise, Grayscale, Fidelity, and VanEck—to launch spot Solana ETPs. These filings are now awaiting approval from the U.S. Securities and Exchange Commission (SEC), which is expected to announce its ruling by October 10. With potential approval, both retail and institutional investors may soon find themselves purchasing SOL in a manner akin to stocks.
In addition to the anticipated ETP approvals, Solana has garnered attention from the investment community in a different way. Last weekend, Forward Industries (FORD), a previously quiet microcap, disclosed that it raised $1.65 billion from high-profile crypto investors, including Galaxy Digital, Jump Crypto, and Multicoin Capital. The company aims to utilize these funds to acquire and stake SOL, effectively transforming Solana into a revenue-generating asset on its public balance sheet. Leading this initiative is Kyle Samani, co-founder of Multicoin, who has been a long-time advocate for Solana.
Hougan compares Samani’s role to that of Michael Saylor for Bitcoin or Tom Lee for Ethereum, emphasizing how influential figures can convert technical details into mainstream narratives. Despite the optimism, Solana must still prove its merit.
The blockchain’s primary selling point is its speed. Unlike Ethereum, which requires additional layers to enhance scalability, Solana operates transactions on a single chain. A new upgrade is set to reduce the transaction finality time from 12 seconds to an impressive 150 milliseconds, while transaction fees remain extremely low, hovering under a cent.
However, there are trade-offs associated with Solana’s approach. Critics argue that its layout leans more toward centralization compared to other networks, which may lead to vulnerabilities in case of network failures. Proponents counter that Solana’s efficiency makes it uniquely positioned to handle high-volume applications, such as tokenized assets and stablecoins, on a global stage.
The evidence of this growth is undeniable. Currently, Solana ranks third in stablecoin liquidity and fourth in tokenized assets, with asset volume climbing by an impressive 140% this year.
Despite its progress, Solana still has a market capitalization of approximately $116 billion, which is considerably smaller than Bitcoin’s $2.2 trillion and Ethereum’s $519 billion. This smaller size means that relatively modest inflows can have a pronounced impact on its price. For instance, Hougan suggests that the investment from Forward Industries could affect SOL similarly to how a $33 billion investment might influence Bitcoin.
Given these developments, Hougan advocates for keeping a close eye on Solana as it navigates the challenges and opportunities ahead.
