For the past several months, Solana (SOL 1.06%) has been one of the hottest cryptos in the market. Over the past 30 days, Solana is up 88%. And for the year, Solana is now up a sizzling 437%.
While this eye-popping triple-digit performance may seem unsustainable, one event could send Solana skyrocketing even higher: a relisting on the Robinhood Markets (HOOD 4.44%) crypto trading platform. There are two important reasons why this relisting could be a catalyst for future gains.
Removal of regulatory uncertainty
First and foremost, a Robinhood relisting could help remove some, if not all, of the regulatory uncertainty around Solana. Back in June, Robinhood delisted Solana amid regulatory concerns from the Securities and Exchange Commission (SEC). While the SEC didn't take any enforcement action against Solana, the crypto token was mentioned in lawsuits filed against cryptocurrency exchanges Binance and Coinbase Global. The lawsuits mentioned "unregistered securities," with Solana as a potential example.
Robinhood's delisting of Solana at the end of June was out of an abundance of caution. The problem, though, is that it introduced an element of fear, uncertainty, and doubt about Solana. It seemed to suggest that, sooner rather than later, the SEC might be coming after Solana. So, if Robinhood decides to relist Solana, it would go a long way in removing all the regulatory uncertainty around Solana, thus making it "safe" for risk-averse investors again.
The return of the retail investor
Secondly, a Robinhood relisting could bolster Solana's retail investor base. Right now, you can get real-time market updates about Solana on Robinhood, but you can't trade it. Once Solana gets relisted on Robinhood, it will be possible for the average retail investor to buy Solana with just a few clicks. Given that Robinhood has over 10 million monthly active users, a relisting could generate a substantial source of new money flowing into Solana.
Image source: Getty Images.
Moreover, it's these retail investors who are also potential users of the Solana blockchain ecosystem. The investor base on Robinhood skews young, and these are exactly the types of investors drawn to tech stocks and cryptocurrencies. Once they invest in Solana, they would presumably be more likely to buy non-fungible tokens (NFTs) minted on the Solana blockchain, experiment with the new Solana crypto phone, and stake their Solana tokens for passive income. All of that new blockchain activity would make Solana even more attractive to other investors.
For now, Solana's steep upward trajectory seems to be driven largely by institutional investors. According to CoinShares, which tracks crypto inflows and outflows, Solana has seen massive buying activity by institutional investors throughout the year. That is leading some high-profile institutional investors to embrace Solana publicly. On CNBC, for example, Ark Invest's Cathie Wood recently extolled the virtues of Solana, calling it faster and more cost-effective than other blockchains.
Thus, a new groundswell of support coming from Robinhood investors could help bolster this strong positive sentiment that already exists around Solana. With both retail and institutional investors rallying around Solana, there is likely to be strong upward price momentum.
Will Robinhood relist Solana?
There's certainly reason to think that a relisting might be in the works. During Robinhood's most recent quarterly earnings call, CEO Vlad Tenev indicated that a relisting could come as soon as the SEC provides additional regulatory clarity. He didn't list any specific conditions for Solana's return, but at least he did not rule out the possibility.
From my perspective, there's one good reason why Robinhood might decide to relist Solana soon: The addition of a "hot" crypto like Solana might provide a lift to Robinhood's crypto trading platform. In early November, the company posted dreadful numbers for the last quarter. Crypto trading revenue was down 55% from the year-earlier period and monthly active users were down 16%. So wouldn't it make sense to relist a popular crypto token like Solana?
Solana for the long haul
If you are thinking about buying Solana, just be sure you are buying Solana because it is a good long-term investment, and not just because the potential exists for short-term gains. If you are simply attempting to market time a Robinhood relisting, then you are doing it all wrong.
That being said, the possibility of a Robinhood relisting is certainly exciting for Solana's long-term prospects. It would help clear the deck of any regulatory concerns, while further diversifying and expanding Solana's investor base. In short, it could make Solana a better buy than it already is.
