As of March 13, Solana (SOL) holds its position as the sixth-largest cryptocurrency by market capitalization, valued at $64 billion. Currently trading at $126.11, SOL has shown a strong recovery but remains nearly 60% below its all-time high of $295.40, which was recorded in January this year.
According to CoinCodex, Solana’s price could rise to $288 by the end of the year, an impressive 270% increase from its current level. However, the much-anticipated $500 target remains a longer-term projection, with estimates placing it closer to 2029. More conservative forecasts suggest that SOL could reach around $300, provided it successfully breaks key resistance levels at $130 and $140. To assess the feasibility of these targets, let’s examine the key factors shaping Solana’s price trajectory.
1. Regulatory Developments
With Donald Trump back in office as a pro-crypto president, the outlook appears favorable for the industry. Previously, Solana was among the digital assets Trump considered for inclusion in the U.S. crypto stockpile, alongside Ripple (XRP), Ethereum (ETH), Cardano (ADA), and Bitcoin (BTC). However, the administration later limited its selection to tokens seized through enforcement actions.
A key development to watch is President Donald Trump’s nomination of Paul S. Atkins for Chair of the U.S. Securities and Exchange Commission (SEC). Atkins, known for advocating reduced regulatory burdens and promoting financial innovation, has yet to be confirmed by the Senate.
In the interim, Acting SEC Chair Mark Uyeda has initiated a dedicated task force, led by SEC Commissioner Hester Peirce, to clarify which digital assets qualify as securities and which fall outside the SEC’s jurisdiction. This move aims to provide much-needed regulatory clarity, potentially benefiting Solana and the broader crypto market.
2. Competition from Other Blockchains
Ethereum, Solana’s biggest rival, has made strides with its Dencun upgrade in March 2024, which improved scalability and reduced fees. Additionally, the Pectra upgrade, set for this year, aims to further optimize Ethereum’s scalability, transaction efficiency, and security. These advancements pose a challenge for Solana, requiring it to innovate and differentiate itself to maintain its market share.
In response, Solana has been actively developing its network. Recently, the SIMD-228 upgrade proposal reached quorum with 71.85% of votes in favor. This proposal seeks to reduce Solana’s inflation rate by 80%, which could make SOL a more attractive asset by decreasing token dilution and strengthening its long-term value.
3. Market Adoption and Institutional Interest
Institutional interest in cryptocurrencies has been growing rapidly, with crypto exchange-traded funds (ETFs) expected to surpass precious metal ETFs by the end of the year. In June 2024, 21Shares filed an S-1 application for a spot Solana ETF in the U.S., just a day after VanEck submitted a similar request. However, the U.S. Securities and Exchange Commission (SEC) did not acknowledge either application at the time.
More recently, the Chicago Board Options Exchange (Cboe) has applied on behalf of Franklin Templeton to list a Solana ETF, joining other major asset managers like Grayscale, Bitwise, and Canary Capital, who have also filed applications for Solana-based investment vehicles.
If a Solana ETF receives approval, it could significantly boost SOL’s price by making it more accessible to institutional and retail investors. However, as explained in our previous coverage, the SEC has delayed its decision on multiple crypto ETFs, including those tied to XRP, Solana, Litecoin, and Dogecoin, signaling ongoing regulatory uncertainty. Despite this, the increasing number of institutional players seeking exposure to Solana reflects growing confidence in its long-term potential.