Is Solana a Once-in-a-Decade Buying Opportunity Below $250?

Cryptocurrencies are back in vogue. The entire industry’s market cap sits just under $3.5 trillion (as of Jan. 28), with investors adopting a risk-on approach.

Solana (CRYPTO: SOL) has benefited tremendously from this trend. Its price has skyrocketed 640% in the past 15 months. And it’s up 23% already this year.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

As the innovative digital asset trades below $250, is Solana a once-in-a-decade buying opportunity right now?

Compelling properties

Solana currently carries a market cap of $112 billion. This makes it the fifth most valuable blockchain network on the face of the planet. It's clear the market sees something intriguing about Solana to make it worth so much.

Solana possesses unique properties that help it stand out in the crowded crypto field. It operates a proof-of-stake consensus mechanism to approve transactions. However, Solana also utilizes something called proof-of-history, which keeps track of time in a more data-efficient manner.

The result is that Solana’s network is incredibly fast. It can theoretically process 50,000 transactions per second (TPS) at very low fees. For comparison’s sake, Bitcoin and Ethereum, the two most valuable cryptocurrencies, can handle roughly 4 TPS and 14 TPS, respectively.

Greater usage

Solana's speed and low fees make it useful in the world of payments. Solana Pay debuted roughly three years ago to simplify merchant-consumer transactions, aiming to boost innovation and lower costs. The service is integrated with Shopify, showcasing its appeal to a major e-commerce platform and its customers.

Solana is also working on a mobile strategy. So far, it has released one smartphone, the Saga. Another device, known as the Seeker, is expected to launch this year. Despite soft demand, the entire purpose of this effort is to give users an easier way to onboard into the crypto economy, which might result in greater demand for Solana.

The network is seeing more usage. Total value locked (TVL), a measure of the amount of money that’s locked into a particular blockchain, is $11.1 billion on Solana. That figure still pales in comparison to Ethereum’s $63.2 billion, but Solana’s growth since the start of 2024 has been astronomically higher.

Solana is becoming a hotbed for meme coins. President Donald Trump and first lady Melania Trump each launched their own meme tokens on the Solana blockchain to immediate success. Despite meme coins providing no value, this certainly gives Solana a vote of confidence that could support more activity in the future.

There are also rumors swirling about the Securities and Exchange Commission approving Solana exchange-traded funds (ETFs). A positive development could see huge amounts of capital flowing to Solana.

Uncertainty creates risk

There has been a lot working in Solana’s favor. This is evident in its price moving markedly higher since late 2023. And the Trump administration’s positive stance toward the cryptocurrency industry could be all the convincing that investors need, as it could usher in a new era of capital, innovation, and adoption in the space. Time will tell.

But given such a big jump over a relatively short period, I don’t think Solana is a once-in-a-decade opportunity today. The crypto market is characterized by times of boom and bust. It's easy to believe we are closer to the former situation.

Add this to a still very uncertain future for crypto overall. I don’t believe anyone has any confidence in what the industry in general, and Solana in particular, will look like five years from now. In my opinion, meme coins aren’t the future. That uncertainty introduces a lot of risk.

I’m not a buyer of Solana, but owning it could make sense for investors comfortable taking on extra risk in their diversified portfolios.

Should you invest $1,000 in Solana right now?

Before you buy stock in Solana, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Solana wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $763,921!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of January 27, 2025

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Shopify, and Solana. The Motley Fool has a disclosure policy.