2025 is set to be a huge year for cryptocurrencies with a wide range of new and established options available for consumers to explore, including Solana (SOL).
Following a massive surge in value at the end of 2024, the crypto industry found itself entering the new year on the crest of a wave, and a variety of factors seem to be going in its favour moving forward.
This has led to a lot of new crypto users entering the market on the lookout for the best-established cryptocurrencies that can be used as alternatives to fiat currencies, as well as emerging projects with the potential for huge returns on investment.
This will provide a boost for crypto exchanges as well as other businesses within the crypto ecosystem as consumers look for safe and secure sources that ensure accurate information and sources for them to find the best presale opportunities. (Source: https://coinfoundation.com/)
As Bitcoin goes from strength to strength and global superpowers begin the creation and implementation of regulatory frameworks consumers will look towards established cryptocurrencies and stablecoins for security.
One option that is gaining a lot of traction and has the potential to rise in value during the first quarter of 2025 is Solana.
Solana Background
The Solana blockchain was launched by Solana Labs in 2020 with its native SOL coin. Running on a proof of stake model which uses a consensus mechanism to process transactions and create a new block, it also incentivizes its users who use their crypto as collateral.
The purpose of the Solana Blockchain’s design was to decentralize apps and support smart contracts. However, it has faced some difficult times including outages when high transaction numbers have impacted the blockchain.
A lawsuit in July of 2022 was followed by a hacking incident where $8 million worth of Solana was stolen from four wallets. However, despite these troubles, everything is pointing towards Solana being a reliable investment for the start of 2025.
Solana’s value has been subject to significant fluctuation since its launch with the blockchain network’s market capitalization reaching $74 billion in November 2021 and its tokens hitting $259.96.
This popularity was sparked by the NFT rush but the bankruptcy of FTX saw Solana’s price drop by 40% in one day. 2023 saw Solana’s value begin to rise again before it was announced by the SEC that Solana would be deemed a financial security, causing another slump.
Despite these hardships, Solana crypto is currently valued at over $240, with projections of a positive performance expected for the first quarter of 2025.
Some reasons for its popularity include its transaction speeds and low transaction fees which make it a suitable alternative to Ethereum.
The technology that Solana uses enables algorithms to deal with performance bottlenecks, making it a scalable option, and its PoH (Proof of History) consensus model timestamps and verifies transactions quickly, improving security and transparency.
Because of its capabilities, versatility, and expanding ecosystem, Solana is often compared to Ethereum, the leading dApp (decentralised application) blockchain.
Both Ethereum and Solana make use of smart contracts, computer programs that automatically execute terms of agreements between relevant parties. Systems are programmed to perform these actions when predefined conditions have been met, streamlining processes.
Because they are stored on the blockchain they have robust protection and are extremely difficult to forge or alter. Smart contracts are typically used for the management of digital assets, the automation of payments, supply chain management, and decentralized apps.
By reducing the need for intermediaries, and arbitration costs, and minimising the risk of fraud losses, smart contracts are an excellent way to lower overheads and reduce fees.
Like Ethereum, Solana also uses PoS but enhances the processes by implementing PoH as well. Where Solana really stands out against Ethereum is in the speed of transaction processing. According to Solana Compass, the blockchain is capable of processing 65,000 tps (transactions per second) compared with Ethereum’s 12-15 tps.
The average cost per transaction on Solana works out at $0.00026 compared with Ethereum’s $0.30 offering impressive value for money.
The Trump Effect
One of the biggest factors to impact the value of cryptocurrencies and influence the industry’s future is the recent US presidential election.
Trump’s inauguration on January 20th marked a significant step forward for the cryptocurrency industry in the US.
Immediately after it was announced that Trump would become the 47th president of the United States of America, cryptocurrencies enjoyed a huge rise in value. Bitcoin has been able to smash through previous record highs and maintain value, and this has drawn attention to the industry as we enter 2025.
The reason that cryptocurrency has benefitted so much from the news about the new Trump administration is that he made it clear he would support the industry should he be voted in.
Under Biden’s administration, the cryptocurrency industry faced setback after setback. This included the Energy Information Administration (EIA) carrying out a survey requiring Bitcoin mining companies to provide sensitive data which would then be published.
This comes after an attempt by the Securities and Exchange Commission to sanction crypto exchanges due to registration violations. The administration has also attempted to levy heavy taxes on the industry based on the use of electricity use for crypto mining.
In contrast to this, Trump explained that he would be pro-crypto and fully support the industry. Despite being dead set against cryptocurrencies back in 2019, the new president has changed his mind and has now become an ally to the crypto industry and its users.
His dedication to creating a dedicated crypto and AI role within the White House, and discussions are in place to create an advisory council to further facilitate industry growth.
David Sacks has been announced as the White House’s new AI and crypto czar and has been tasked with guiding the administration through the process of creating regulatory frameworks for both developing industries.
One of the most important aspects of this new role will be creating a framework that provides the clarity that the crypto industry in America needs to thrive.
Trump has gone on record to say that he wants the US to become the crypto capital of the world, and is following through on this by creating new positions in government to make it possible.
Trump has also pledged to focus on US crypto offerings and meetings have already taken place with some, including Solana. Cryptocurrency’s improvement since the announcement of Trump’s presidential win has been evident, and further support for altcoins like Solana should give them the boost they need to compete.
Solana’s Value Potential
Solana has a lot of advantages in the current crypto market as it is already well-established with a high-value potential. While Bitcoin continues to ride high at the top, investors are unlikely to see the massive returns on investment that were possible during its early days.
By retaining its value it will help cryptocurrency adoption from retailers and industries as it won’t be as risky as more volatile cryptocurrencies. Similarly, stablecoins will also help the industry get a foothold in other markets.
However, Solana offers both the benefit of being established and having the potential to earn investors money. Currently valued at just below $250, there is belief among industry experts that Solana could hit $500 this year.
High speeds and low fees could facilitate widespread adoption, while its high speeds make it an excellent option for hosting DeFi (decentralised finance) apps and Web 3.0 services.
DeFi apps allow users to carry out financial transactions using blockchain technology. The future of borrowing, lending, and trading looks set to use smart contracts and decentralised networks as consumers want greater control and convenience.
Investments in crypto, stocks, and digital assets have been making use of these facilities in the last few years and it is likely adoption will grow.
Another reason that Solana is well positioned for the future is that its blockchain is well suited for the next generation of the internet, Web 3.0. This development will see users being able to fully immersive themselves in the digital experience and allow users to gain greater control over their personal data.
Where Web 2.0 relies on fiat currencies, Web 3.0 will be reliant on cryptocurrencies. It will have a strong focus on providing greater transparency, and personalised user profiles, and will help to improve the relationships between companies and institutions and the people who use their services.
While there are no guarantees in any investment opportunity, there are opportunities with potential and Solana appears to fall into that category. Both industry and political climates are in a good place for cryptocurrencies, and the benefits that Solana offers could see it grow in popularity and value.
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