the Standard & Poor’s 500 (SNPINDEX: ^GSPC) The market index saw a total return of 25% in 2024. It’s a great year for the stock market, but it can’t hold a candle to the cryptocurrency market.
According to CoinMarketCap, the market cap of each cryptocurrency added up to $1.65 trillion at the end of 2023. Their combined market cap reached $3.30 trillion on December 19, which could double in less than 12 months.
Crypto pioneer Bitcoin (Crypto: Bitcoin) By 138% during the same period. Smart contracts Innovative Solana (encryption:sol) It showed gains of 101%, ahead of the cryptocurrency sector as a whole.
But the picture changes if you zoom it out a little. Starting out of the doldrums in December 2022, Solana stands head and shoulders above Bitcoin and the stock market with 2,000% price gains:
So Solana has a recent history of outperforming Bitcoin, even though the larger cryptocurrency has enjoyed a very impressive return in the same time period. It would be pretty great if this two-year trend continues in 2025 and beyond.
Is this a good time to rebalance your crypto holdings, and dip into Bitcoin to buy more Solana instead?
First, let me point out that the recent rise in Solana prices started from a very low point.
Caught up in the financial collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange, Solana recently dropped from $259 to $10 per token in about a year.
It’s not easy to recover from a drop of this magnitude, but it’s still an easier task than jumping from a higher starting point. Bitcoin also suffered from FTX disasterBut its price drop was much lower than that of Solana. In other words, Solana’s impressive gains from the summer of 2022 were supported by an artificially low starting price.
On the upside, Solana is poised to perform well. Cryptocurrency is still the best performer when it comes to executing smart contracts in a hurry, which is good for automating financial transactions and other asset-based changes.
In particular, Solana’s high-speed contracts become useful when you are managing a large volume of these decentralized programs at the same time in a time pressure situation. Mobile gaming comes to mind, along with blockchain-based trading platforms and non-fungible token (NFT) sales. Someday, maybe you’ll buy gum and gas through Solana’s Express Deal. This is the kind of thing a cryptocurrency with smart contracts and fast transaction settlement can do.
Therefore, Solana’s return to the top ten list of large and popular cryptocurrencies makes sense. Owning some Solana will probably be a good idea in 2024, as the token seems likely to be widely used in real-world applications within the next couple of years.
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