Bitcoin (BTC) and Ethereum (ETH) still stand out as the two most popular cryptocurrencies. For years, Bitcoin was the only option for investors interested in the benefits of non-fiat currency. Ethereum is the only crypto that has come close to dethroning BTC. Now, there’s a chance that Solana (SOL) could emerge as a new contender.
Crypto Is in a Significant Slump
Cryptocurrencies overall have experienced a significant slump lately.
Bitcoin peaked on November 12, 2021, at $64,400 per coin. A year earlier, you could have bought a coin for about $16,000. In Q2, BTC hovered closer to $30,000 per coin before plunging recently closer to $20,000.
Ethereum hasn’t look much better.
It also peaked on November 12, 2021, at a price just slightly under $4,645. A year earlier, investors could have bought ETH for about $460. In recent months, Ethereum has hovered close to $2,000 per ether before also plummeting closer to $1,000.
The entire crypto market lost over $1 trillion within 6 months. With these shocking losses, investors are looking for a profitable way forward. Many have decided to bet on Solana.
What Makes Solana Different From Other Cryptos?
Solana hasn’t performed better than other cryptos recently. It peaked at around $260 on November 8, 2021, and fell almost 80% over subsequent months.
Considering that the stock market slumped in Q1 and Q2, though, it’s not a surprise to see Solana’s trend correlate with the rest of the crypto market. But looking to the future, Solana has several features that could make it the next big mover in cryptocurrency.
Solana Works Faster Than Ethereum
In an age when digital transactions happen instantly, Ethereum can feel like it takes forever. At most, you can expect the platform to process about 13 transactions per second – (Ethereum 2.0 promises up to 100,000 per second, however!). Not surprisingly, the queue grows very long on some days until the switch. Solana has managed to build a platform that can process 65,000 per second.
Despite the fast speed, Solana still has the features that make Ethereum successful. It can handle decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized apps (dApps). But it currently does the job much faster than Ethereum’s network.
Solana Pay Will Let Merchants Accept Crypto Payments
Bitcoin and Ethereum have enjoyed success for several reasons, including when they released their coins to the public. Bitcoin was the first crypto, and Ethereum was one of its earliest competitors. Since they have been around for a while, they have larger networks of developers, investors, and applications.
Solana plans to enter this space soon with Solana Pay. The payment rail would make it easy for merchants to accept Solana crypto. The company hopes to overthrow Ethereum as a popular payment option by focusing on faster speeds and energy-efficient exchanges. Unlike Bitcoin and Ethereum, Solana Pay works as quickly and efficiently as traditional payment systems.
If Solana manages to become a popular payment option for merchants and consumers, its value should grow tremendously.
Should You Invest in Solana?
Pessimistic critics argue that cryptocurrencies are too volatile to include in investment portfolios. While some people have made millions by investing in crypto, most of those investors did so by luck. For example, they might have bought a Bitcoin out of curiosity when the price was below $50. At such a low price, buying the coin didn’t involve much risk. Those early investors who held their coins for years just happened to make good decisions. They couldn’t have predicted that they would make tens of thousands of dollars per coin from such small investments.
More optimistic crypto traders say that today’s investors have more information than before and can make data-driven decisions. According to them, Solana’s potential success isn’t a matter of luck — the coin will succeed because of its innovative and disruptive technology.
The keys to growth of bitcoin and ethereum were network effects. If Solana can build a network of developers, investors, and applications as broad as Ethereum, expect its market cap to rival its older crypto competitor in the coming years.