It's been a difficult year for Wall Street, and the crypto market has been hit especially hard. Many major cryptocurrencies have seen their prices drop by 50% or more so far this year, and it can be tough for some investors to stay optimistic.

Solana (SOL -0.32%) has had a particularly rough stretch. While some cryptocurrencies such as Ethereum (ETH -1.25%) have started to rebound in recent weeks, Solana is still down around 85% from its peak in November.

While that may not seem like good news on the surface, investing now means buying at a steep discount. Is it really the best time to invest in Solana, though? Here's what you need to know.

Is Solana still a good investment?

Solana was one of the breakout stars of the crypto world last year, and it was also one of the fastest-growing cryptocurrencies in history. Between January 2021 and its peak in November, it saw returns of nearly 17,000%.

However, Solana has been losing its spark. Part of that is due to the multiple major outages the network has experienced over the past year, some of which lasted several hours and caused serious disruptions in the network.

In addition, Solana experienced a separate attack in early August in which hackers stole millions of dollars from more than 8,000 wallets. While developers seem to have the issue under control now, many investors are quickly losing confidence in Solana.

Another potential concern is Ethereum's latest upgrade, The Merge. Currently slated for September, The Merge will move Ethereum from a proof-of-work (PoW) mining protocol to proof-of-stake (PoS), significantly improving its speed.

Part of the reason Solana gained popularity in the first place was that it's so much faster than Ethereum. At the moment, Ethereum can only process around 12 transactions per second (TPS), while Solana can reportedly handle up to 65,000 TPS. When Ethereum users and developers grew frustrated with the network's sluggish speeds, many of them flocked to Solana.

Once Ethereum completes its upgrade, though, it could potentially process up to 100,000 TPS. If that happens, Solana could lose its biggest advantage.

Can Solana make a comeback?

It's not all bad news for Solana, and there is a chance it could rebound. Earlier this year, it launched Solana Pay, a new project that aims to disrupt the financial services industry. Through Solana Pay, merchants can accept cryptocurrency as a form of payment, with instant transactions and fees that are just a fraction of a penny.

Also, there are no guarantees that Ethereum's upgrade will go smoothly, which could work in Solana's favor. Ethereum has a history of delaying updates, and because The Merge is such a major shift, there is a chance that the network may experience hiccups. If users get frustrated with Ethereum, Solana could benefit from it.

Finally, crypto isn't necessarily a zero-sum game, meaning it is possible for multiple cryptocurrencies to peacefully coexist. If Solana can carve out a niche for itself (potentially through Solana Pay), it may not need to compete directly with Ethereum or any other networks to succeed.

Solana's slump can be discouraging for investors, but it still has potential. Just be sure you understand the risks of this particular cryptocurrency before you buy. Nobody knows for certain whether Solana will rebound, but by weighing the pros and cons, it will be easier to decide whether it's a good fit for your portfolio.