It's that time of year -- time to make a list and check it twice. I'm not talking about your holiday gift list though. I'm talking about a list of cryptocurrencies to add to your portfolio before the new year. With thousands to choose from, this seems like a tough job.
So, I'll help out by suggesting my top crypto to buy before the new year. It's got momentum, is proving its real-world utility, and has plenty of room to grow. It also is holding its own against bigger rival Ethereum. Read on to learn more about this dynamic crypto player.
Putting gains into perspective
I'm talking about Solana (SOL 1.11%). Some might argue that this cryptocurrency's gains may be limited. It's already soared more than 15,000% year to date. That seems like a lot. But it's important to put that number into perspective. Solana started low -- at about $1.50 a token. From that kind of level, it's easy to quickly multiply once investors see the potential of the particular asset. I don't expect Solana to soar 15,000% every year. But that doesn't mean the story is over.
Here's why: Work is far from over when it comes to building out Solana's platform. The mainnet -- or independent blockchain -- still is in the beta stage. The platform is bringing on more projects, users, and investors. So, there's a lot of growth yet to come. And a move out of the beta stage to full release could be a big catalyst for Solana.
As for what Solana has accomplished so far, well, that's another reason to be optimistic about the future. The platform has become one of the best for speedy transactions. Right now, Solana can process about 50,000 transactions per second. By comparison, Ethereum processes about 30. An upgrade to Ethereum will lift that figure to 100,000. But guess what? Solana's architecture means it eventually would be able to process more than 700,000 transactions per second.
The secret to Solana's speed has to do with the method it uses to validate transactions. It's called proof of history and involves marking each block of data with a timestamp. This helps computer nodes that validate transactions quickly assemble the data. As a result, Solana can process more transactions per second than blockchains using other validation methods.
The platform for Degenerate Ape Academy
Solana also is showing its strength in the world of non-fungible tokens (NFTs). An NFT is digital proof of ownership of an asset -- such as artwork. Ethereum is the top NFT platform, but Solana has quickly gained in the ranks. Solana's biggest NFT success so far is Degenerate Ape Academy -- a series of apes in various costumes from sailor to astronaut. That collection has generated more than $113 million in sales so far, according to CryptoSlam. And Solana has become the fourth-biggest blockchain in terms of all-time NFT sales volume. This has also helped Solana gain users. The platform's Phantom wallet recently reached one million active users. This is a wallet you can use to trade NFTs.
Beyond NFTs, Solana's blockchain also is the place for decentralized finance applications and gaming. Right now, more than 350 projects operate on Solana.
All of this sounds promising. But before you rush out to add Solana -- or any other crypto -- to your portfolio it's important to keep this in mind: Investing in cryptocurrencies remains risky. Never invest more than you can afford to lose. For investors who take this approach, Solana makes a smart addition to portfolios right now.