Solana (SOL 2.49%) has been one of the surprise breakout cryptos of 2023, up more than 152% for the year. Solana now trades around $25 and is finally back in the list of Top 10 cryptos by market capitalization. Best of all, sentiment in the crypto industry has turned decidedly bullish, and that bodes well for Solana as well.

For Solana to hit a price target of $40, though, a lot still has to go right. Here's a closer look at two key factors.

1. The FTX factor

It's impossible to talk about Solana without mentioning the spectacular meltdown of FTX (FTT) last year. Solana was the one blockchain most closely associated with former FTX CEO Sam Bankman-Fried. And Solana paid a huge price for that, as investors panicked about potential FTX contagion. For the year, Solana was down nearly 94% and traded under the $10 mark in late December. At that point, the fear level was so high that some investors even suggested that Solana might not make it.

Investor with laptop sitting on steps.

Image source: Getty Images.

One way of interpreting Solana's performance in 2023 is that it has been a massive relief rally. Investors realized they overreacted to the threat of FTX contagion and are now buying Solana hand over fist until the crypto regains its former levels. That's why I think the $40 price target is so attainable. After all, on Nov. 4, just days before FTX went into full meltdown mode, Solana was trading at $38. 

2. The mobile crypto factor

Moreover, Solana has one huge growth catalyst in place that might help the crypto soar much higher. On April 13, Solana officially launched its Android-powered Saga mobile phone -- the first-ever "crypto phone" by a major Layer 1 blockchain network. The goal of the Saga phone is to bring crypto to the masses, and the way to do that is by offering a phone that is as crypto-friendly as possible. The Saga, for example, has an extra layer of security that makes it possible to use it as your blockchain wallet

For the past 12 months, Solana has been building out its vision for web3, and the Saga phone fits neatly into this vision. For example, to make mobile crypto payments as convenient and secure as possible, Solana created the Solana Pay network. To make web3 apps as easy as possible to develop for mobile, Solana released the Solana Mobile Stack. To make these new web3 apps as alluring as possible to customers, Solana created its own mobile app store. You can see where I'm going with this -- if Solana becomes the first-ever blockchain to support mobile crypto at significant scale, that would be huge in terms of future growth.

What could go wrong?

Of course, there are several risks to investing in Solana right now. The biggest risk is that the new $1,000 Solana mobile crypto phone turns out to be a failure. While the phone has been highly anticipated within the crypto community, we really don't know how it will perform commercially. The Saga has been available for pre-order since last year, but it will officially go on sale to the public on May 8. So keep a close eye on early sales figures for this phone.

Moreover, there's the issue of blockchain network performance. Solana suffered a number of significant network outages last year and promised to have all the problems ironed out by the start of this year. But guess what happened in February? There was another 20-hour network outage, and Solana users were not pleased. Imagine how you would react if someone turned off your mobile phone's network for 20 hours, with no explanations given.

Should you buy Solana?

While a price of $40 for Solana implies a nearly 60% return from today's current price levels, I think it's within reach. All Solana has to do is return to its price point before the FTX scandal broke.

But I think the case for Solana is much more bullish than that. In addition to its expanding mobile crypto strategy, Solana also has a dynamic web3 strategy. So I think the upside for Solana could be as high as $100, which is where it was trading at almost exactly one year ago. So, yes, you should definitely consider buying Solana while it's still below $40. The best is yet to come.