Shiba Inu (SHIB -0.42%) was one of the trendiest cryptocurrencies to come out of 2021, seeing explosive returns throughout the year. If you were lucky enough to invest and sell at just the right moments, you could have made a substantial amount of money.
However, Shiba Inu has since plummeted by more than 71% from its peak in October. While it could potentially rebound, it may struggle to keep up with its stronger competitors over the long term.
If you missed out on Shiba Inu, that's OK. There's another cryptocurrency that has the potential for serious gains, and it's a safer overall investment, too: Solana (SOL 0.43%).
Will Solana thrive in 2022?
Solana was one of the breakout stars of the crypto world last year, with its price soaring by more than 11,000% over the course of 2021. While it has slipped since then (falling by roughly 50% since its all-time high in November), that also means it's more affordable right now -- making it a smart opportunity to buy.
There are several reasons why this year could be a good one for Solana. For one, it's steadily gaining traction in the decentralized application (dApp) and non-fungible token (NFT) spaces, becoming a strong rival to Ethereum (ETH 0.59%).
Ethereum is still the leader when it comes to dApps, but its slow transaction times and high fees have resulted in developers and users flocking to Solana. While Ethereum is in the process of updating its network to increase its speed and lower its costs, that isn't expected to be completed until sometime next year. That's a lot of time for Solana to continue gaining market share.
In addition, Solana recently announced its latest project, Solana Pay, which is a peer-to-peer payment protocol. Through Solana Pay, users can make real-time payments to merchants using SOL (Solana's native token) or any other Solana-supported cryptocurrency. With near-zero fees and little impact on the environment, Solana Pay could be more affordable and efficient than other payment coins, such as Bitcoin.
Some have even compared Solana Pay to PayPal, saying that it could potentially revolutionize the way cryptocurrency is used as a form of payment.
Is it time to invest in Solana?
Solana could have a bright future, but like all cryptocurrencies, it's still speculative at this point. Nobody can say for certain how Solana will perform (or whether it will succeed at all), which can make it a risky investment.
Before you buy, make sure you're only investing money you can realistically afford to lose, and prepare yourself for more volatility. Even if Solana does succeed over the long term, it will likely be a bumpy road along the way as crypto continues to find its footing.
Also, double-check that the rest of your portfolio is in good shape before investing in crypto. Because Solana is a riskier investment, it's wise to ensure you have a strong, diversified selection of stocks in your portfolio. This way, if Solana does flop, you'll have plenty of solid investments to fall back on.
Shiba Inu isn't the only cryptocurrency to have seen phenomenal earnings over the past year, and Solana's growth streak could be just getting started. If you're willing to take on higher risk for the potential to earn substantial returns, Solana could be the investment for you.