Solana (SOL) has etched its name in the annals of cryptocurrency history by reaching a new all-time high (ATH) of $262. This remarkable achievement marks a significant recovery for the digital asset, which faced turbulent price fluctuations over the past three years. SOL’s journey from plummeting to $8 during the FTX exchange collapse and subsequent crypto bear market to its current valuation is nothing short of historic.
Solana’s Path to Recovery and the USDT Flippening
Renowned as the “Ethereum killer,” Solana (SOL) has once again captured the attention of the crypto community. Despite experiencing a dramatic decline following the collapse of FTX, a crypto exchange led by Sam Bankman-Fried, SOL has made an impressive comeback over the past two years. As of now, SOL ranks as the fourth-largest cryptocurrency, boasting a market capitalization exceeding $123 billion.
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With its current market cap, Solana is just $8 billion short of surpassing stablecoin Tether (USDT), which holds a market cap of approximately $130 billion. To achieve this milestone, SOL requires a further 10% price appreciation to decisively eclipse USDT’s market cap, thereby becoming the third-largest digital asset. It will then trail only Bitcoin (BTC) and Ethereum (ETH) in terms of market cap.
Considering SOL’s recent price trajectory, it’s plausible that the digital asset could outpace USDT’s market cap by the year’s end. In just three weeks, SOL has surged by an impressive 75%, climbing from $148 on November 4 to $259 at present. While the broader crypto market has gained momentum following the victory of pro-crypto US presidential candidate Donald Trump, attributing SOL’s ascent solely to this would be an oversimplification.
Factors Fueling SOL’s Remarkable Turnaround
The resurgence of SOL can be attributed to several key factors that have driven increased network adoption. A significant contributor to this growth is the ongoing memecoin frenzy, which has emerged as a dominant narrative in the crypto market. Memecoins, particularly those built on the Solana blockchain, have gained substantial popularity over the past year, with their total market cap surpassing $10 billion in October alone.
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This memecoin craze has translated into heightened network activity on Solana. Between September and October, the blockchain experienced a remarkable 42% month-over-month increase in active addresses, totaling approximately 123 million.
In addition to benefitting from the memecoin narrative, Solana has witnessed a surge in decentralized finance (DeFi) activity throughout the year. According to DefiLlama data, Solana hosts the world’s second-largest DeFi ecosystem, with a total value locked (TVL) of $9.265 billion.
Moreover, there are growing prospects for a Solana-based exchange-traded fund (ETF). Recent reports suggest that the US Securities and Exchange Commission (SEC) is in active discussions with multiple asset managers regarding the potential launch of a new spot Solana ETF.
Looking Ahead: SOL’s Growth Potential
While achieving a new ATH is a commendable feat for SOL, experts believe the token still has significant growth potential. At the time of writing, SOL trades at $259, reflecting a 6.2% increase over the past 24 hours.
