Solana is an exciting blockchain project that has high scaling abilities, fast transactions, and low fees. At the time, I expected growing adoption and developer activity to support demand, but could Solana reach 1000 dollars?
My scenario allowed Solana to reach $1,000 on the strength of its technology, institutional interest, application ecosystem, and partnerships. A theoretical $1,000 Solana would have a market capitalization of $273 billion, making it the third most valuable cryptocurrency at the prices used in this comparison.
At the time, Solana appeared to be gaining adoption and had many developers working on dapps. Its speed, low cost, and high scalability were likely part of the reason:
| Solana | XRP | Ethereum | |
|---|---|---|---|
| TPS (transactions per second) | 50 000 | 1500 | 7-15 |
| Transaction Speed (block time) | 0.4 Sec | 5 Sec | 15 Sec |
| Transaction Fees | $0.00025 | $0.0034163 | $15 |
As you can see from the table above, Solana is way faster and cheaper than Ethereum and XRP (source: solana.com).
From a pure technology standpoint, I thought Solana belonged among the leading platforms.
However, tech is not the only factor to take into consideration when evaluating a cryptocurrency project:
You need to look at the adoption and how much developers and users are actually using it. We'll look more at that in the last part of this article.
Related analyses:
How Much Are Solana Fees? How Will They Change In The Future?
How Solana Can Reach 1000 Dollars:
At the time of writing, the price of SOL was $40. (source: CoinMarketCap)
To reach a price of $1000 from $40, Solana needs to pull off a 25x - a 2400% increase.
The scale had precedent: other cryptocurrencies had produced larger multipliers before.
AAVE, DOGE, SAFEMOON, ETH, BTC, BNB, ADA, XRP, and many more cryptocurrencies have done much better than 25x in under one year in the past.
Below you'll see that AAVE did a mind-bending 2000x in 1.5 years and that Doge did a 440x in one year:
AAVE 2000x
DOGE 440x
For comparison, I explored the possibility of Dogecoin reaching $10.
This tells us that a $1000 SOL is well within the realm of possibilities when discussing potential growth in the cryptocurrency market.
Mathematically, repeating Solana's Q1 2021 move would clear the $1,000 threshold:
The chart makes the scenario look simple. However, repeating the Q1 move would require far more capital at $40 than it did at $1.60.
It's kind of like throwing a 1.6 lbs heavy stone vs throwing a 40 lbs stone - It takes different amounts of strength to throw them the same "amounts of" distance.
We can actually calculate how much it would take to pump the price from 1.6 bucks all the way up to 1000 bucks:
1000 / 1.6 = 625 (This makes sense concerning the 25x's we talked about above because 25 * 25 = 625. Yeah, I'm a nerd... and also a math student so I guess (hope) I'm excused)
In other words, we need to see a 625x from the beginning of 2021 for Solana to reach 1000 dollars.
Let's take a look at the potential market cap a theoretical $1000 Solana would reach:
Theoretical Market Cap Of Solana At $1000
Market capitalization is the value of all the coins in circulation combined. The current market cap of Solana is, therefore:
273 000 000 (supply) * $40 (price) = $10 920 000 000 (market cap)
Now, let's do the same calculation with a $1000 Solana:
273 000 000 * $1000 = $273 000 000 000
In other words:
If Solana reaches $1000, the market capitalization, which is the value of all circulating coins combined, will reach 273 Billion USD
That seems kind of abstract. Let's put it into perspective by comparing it to the market caps of different coins:
Data from coinmarketcap.com
We see that if Solana reaches $1000, it would be the third most valuable cryptocurrency. This seems like a stretch, I know.
However, other cryptocurrencies will also increase in value during the bull market, giving Solana more room to grow.
Think about it:
If Bitcoin reached $100,000 and Ethereum reached $8,000, their market caps would be much higher, making a $1,000 Solana more plausible within this scenario.
This is what a $1000 Solana looks like next to the predicted prices of Ethereum and Bitcoin:
This looks way more realistic. The fact that the predicted market cap of Ethereum is roughly 4x the market cap of Solana at $1000 is great news.
Summary of this part of the analysis:
If Solana reaches $1000, it will have a market cap of $273 Billion. This would place it as the number three most valuable cryptocurrency given the current prices. However, compared to the predicted prices of this bull cycle, a $1000 Solana will be roughly 1/4 of Ethereums market cap and 1/7 of Bitcoins, which seems way more realistic.
The Adoption Of Solana
When it comes to cryptocurrencies, the network effect is one of the main drivers of the price. The network effect is exponential by nature and is why some coins, like AAVE, go on 2000x surges.
The best way to measure the network is to look at the community behind a coin. Right now, Solana has a great community:
Source: https://solana.com/community
Solana also has a great ecosystem, with tons of dapps built on it and partnerships strengthening its position on the market.
Below you see the number of projects built on and/or collaborating with Solana:
Some of the applications and partnerships at/with Solana
The projects were listed in the Solana ecosystem directory.
In addition, we see institutional interest in Solana. We are getting headlines like this:
5 New Funds Bring $100M to Boost Growth of the Solana Ecosystem (source)
Also, Solana is working with Coinbase Custody, bringing the potential for institutions to buy and hold Solana through Coinbase.
This expanded institutional access to Solana through Coinbase's custody service.
This institutional access supported the $1,000 scenario in my analysis.
Conclusion: Yes, Solana Can Reach 1000 Dollars
**My conclusion was that Solana could reach 1000 dollars. The main reasons were:
High speed, great scaling, and low fees
Institutional interest
Growing ecosystem of applications and strategic partnerships.** Personally, I have invested in Solana. At the time of writing, it takes up about 3% of my portfolio.