Is Solana Still Worth Buying? Realistic $SOL Price Prediction 2025

Yes, Solana: Is It Actually Dead or Will It Start to Recover in 2024?

Introduction

Solana, once one of the top-performing cryptocurrencies in the last bull run, has experienced a consistent decline since the FTX implosion. In this article, we will take an unbiased look at Solana, covering both the bearish effects from FTX and the unique technology and ecosystem adoption it plans to achieve in the next few years. Stay tuned until the end, as I will provide my full price prediction for Solana by the 2025 Bull Run Peak.

The Decline of Solana

From its peak price of $258 on November 6, 2021, Solana’s Soul token has declined to just around $9 at its lowest point. Today, it sits at $19, which is still a 95% drop from its all-time high. The total value locked (TVL) in DeFi protocols on Solana has also experienced a dramatic decline, dropping from $12 billion to just $500 million. The D5 ecosystem on Solana has not seen any growth in the past 10 months, marking a significant drop in metrics.

The Influence of FTX

The decline of Solana can be attributed to its close ties with FTX. In 2021, Solana raised nearly $300 million through a private token sale, with one of its largest investors being Alameda Research, which was later revealed to be essentially the same entity as FTX. During the FTX collapse in November 2022, $1.2 billion flowed out of Solana within a few days, leading to rumors that FTX was offloading its assets, including Solana holdings and ecosystem tokens.

FTX’s Solana Holdings

FTX holds a significant amount of Solana tokens, both locked and unlocked, with a combined value reaching over $1 billion. The recent U.S. court approval for FTX to start selling its crypto holdings for bankruptcy claims has caused fear in the Solana community. However, these tokens cannot be dumped on the market all at once. They are subject to an unlock schedule that lasts for the next five years.

Addressing Concerns: Centralization and Performance

There are two major concerns surrounding Solana: centralization and performance. While Solana has earned a reputation for being a centralized chain, it is not more centralized than other proof-of-stake blockchains. As for performance, Solana experienced several outages in 2022, but most of them were due to performance issues related to the consensus algorithm. In 2023, the network has been functioning smoothly, with only one network outage in February.

Unique Technology and Ecosystem Adoption

Solana’s mission is to be a super-fast blockchain that provides near-instant and near-zero-cost transactions. Compared to other blockchains, Solana stands out with its practically zero cost and instant settlement. This advantage makes Solana the top choice for microtransaction payments and positions it as a retail-focused, mass adoption chain. Solana has also made significant strides in mobile-first decentralized applications, online merchant payments, and decentralized physical infrastructure networks.

FTX Liquidation and Solana’s Tokenomics

The FTX liquidation event has raised concerns about the impact on Solana’s price. However, the unlock schedule for the Solana tokens held by FTX is spread out over the next five years. The monthly release of tokens will have a minimal effect on the market, accounting for only 0.2% of the monthly trading volume. The overall supply of Solana is relatively healthy, with 73% already circulating.

Price Prediction for Solana

Considering the bullish and bearish scenarios, it is unlikely that Solana will reach a new all-time high. A price target of $250 by the end of 2025 seems overly optimistic. A more realistic price range for Solana is between $45 and $250. However, given the competition in the industry, Solana may struggle to achieve a market cap that would support a price of $250. Therefore, an expected return of 5x or a price of $100 seems more reasonable.

Conclusion

While Solana has experienced a decline since the FTX implosion, it still holds potential for the future. Its unique technology and focus on mass adoption set it apart from other blockchains. However, the previous all-time high of $250 will be challenging to reach. Investors should consider the expected return and compare it to other cryptocurrencies like Bitcoin and Ethereum before making investment decisions.

FAQs

1. Is Solana dead?

No, Solana is not dead. While it has experienced a decline in price and TVL, it still holds potential for the future with its unique technology and focus on mass adoption.

2. How will the FTX liquidation affect Solana’s price?

The FTX liquidation will have a minimal impact on Solana’s price. The tokens held by FTX are subject to an unlock schedule spread out over the next five years, and the monthly release of tokens accounts for only 0.2% of the monthly trading volume.

3. What is Solana’s price prediction for 2025?

The price prediction for Solana by the end of 2025 ranges between $45 and $250. However, reaching a new all-time high of $250 seems unlikely, and a more realistic price target is around $100.

4. Is Solana more centralized than other blockchains?

Solana is not more centralized than other proof-of-stake blockchains. While the top validators on Solana control a large amount of the total stake, this is similar to other blockchains in the industry. Solana’s validators numbers are comparable to other proof-of-stake blockchains.

5. What are some of the areas of adoption for Solana?

Solana is focusing on mobile-first decentralized applications, online merchant payments, and decentralized physical infrastructure networks. These areas of adoption leverage Solana’s fast and low-cost transactions to provide a superior user experience.

6. How does Solana’s performance compare to other blockchains?

Solana’s performance has improved since 2022, with fewer network outages and smoother functioning. Its transaction settlement time of 400 milliseconds and near-zero gas fees make it faster and cheaper than other blockchains like Ethereum and its layer twos.

7. How does Solana’s tokenomics and supply compare to other blockchains?

Solana’s tokenomics and supply are relatively healthy compared to other blockchains. The unlock schedule for Solana tokens held by FTX is spread out over the next five years, and the overall supply of Solana is 73% circulating, which is comparable to other layer 1 blockchains.

8. What are some potential risks for Solana’s future?

Some potential risks for Solana’s future include failing to find its use case within the next two years, leading to a decline in market cap and ranking. Additionally, competition from other blockchains and the inability to reach a new all-time high could impact Solana’s price performance.