Key Insights:
Solana achieves a higher growth rate than Bitcoin despite the latter reaching $100k.
SOL managed to beat BTC in the last seven days by 4.5% despite lacking ETF support.
Memecoins have played a large role in ensuring the growth of SOL.
With the possibility of an ETF in the near future, Solana's price could gain immensely.
Solana has outperformed Bitcoin by 4% in the last 7 days. Over the last week, Solana has gained 12%, leaving Bitcoin behind with a margin of 4.5%. This growth in Solana comes at a time when the world has seen an increased adoption of Bitcoin, which is on the verge of crossing $100k.
Solana's Growth Rate in the Last 7 Days
CoinMarketCap
Bitcoin's Growth in the Last 7 Days
CoinMarketCap
Increased institutional adoption, increased buying from private corporations, a higher rate of investment from retail markets via the ETF route, and many other factors have been pushing Bitcoin higher.
Yet, Solana has been able to match that growth rate without any institutional support. The factor that works best for Solana is that its memecoin markets have generated a very high revenue for it. At present SOL memecoins are worth more than $21 billion and generate a daily revenue of $12 million (equivalent to $350 million per month).
Successful memecoins on Solana include BONK, WIF, and POPCAT.
Many other factors support Solana and would certainly ensure a high growth rate in the near to medium term.
Even without the ETFs, Solana has maintained a very high growth rate. At the time of writing, SOL's price is $242, and its market cap is $114 billion.
Currently, only Bitwise, VanEck, and Grayscale Holdings have an active Solana ETF, whether a Trust or an application. There is no approved SOL ETF on the markets yet.
However, after Donald Trump becomes president, the path for clearance of these ETFs seems a near-term possibility. Trump had promised at the 2024 Bitcoin Conference at Nashvilee that he would fire the current SEC chief, who is accused of delaying both Bitcoin and Ethereum ETFs.
Some minor factors have also contributed immensely to sustaining Solana's price at a higher range. Among them, the Solana Saga Phone stands prominently.
To date, Solana has launched two mobile phones named Saga, and both of them were sold out instantly. A Saga user shared a screenshot of the total value of airdrops he received in the last year. The image shows that he has collected $2800 worth of tokens in the period without doing anything.
Though it is unlikely that any SOL user would receive the same value of airdrops, for that particular user, the Saga phone was a net profit, considering it was sold for $599.
Despite the high growth rate, SOL remains a risk due to two major factors: memecoins and profitability.
Solana now has $21 billion worth of memecoins. These memecoins were the main reason Solana transformed itself from an under-performer to an Ethereum rival. Currently, memecoins generate approximately $12 million daily in revenue for SOL (along with DeFi and other sources).
Solana Memecoin Market Cap
CoinGecko
However, unlike other projects, memecoins have very little utility other than just being based on popular memes. The collective trend in demand for memecoins is what makes them highly successful. These memecoin markets have recently seen some curious cases that question their survivability.
A live streamer created a stream where he created a memecoin on Pump.Fun, a tool popular for creating memecoins. The streamer then rug-pulled the entire project, taking away $30k worth of crypto. Though the community later saved the project, this would only be possible if such cases increased.
The second case concerns Solana's profitability. Kyle Reidhead, who owns the Milkroad podcast, earlier mentioned that Solana was much less profitable than Ethereum. While generating $1 in revenue, Ethereum spends $6, while Solana needs to spend $21.
Though these values may change in the future, the general trend might not. Ethereum is expected to be more profitable than Solana in the future. Further, its series of planned upgrades may increase its profitability even more.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.