Through the first five months of 2024, Solana (SOL +6.07%) has more than kept pace with both Bitcoin (BTC +2.59%) and Ethereum (ETH +7.62%). It is up 66%, compared to 65% for Ethereum and 62% for Bitcoin.
That's impressive, but the best might be yet to come. There are three key catalysts that could send Solana soaring this summer.
1. A spot Solana ETF?
The biggest reason that Solana might skyrocket in value involves spot exchange-traded funds (ETFs). We've already seen Bitcoin get a tremendous boost from the launch of new spot ETFs in January. And we're now seeing Ethereum get a huge boost from enthusiasm about the pending launch of new spot Ethereum ETFs. So any guesses as to which crypto could be next to get a spot ETF?
Rumor has it it will be Solana. And it's not just crypto enthusiasts on social media who think Solana could be next. Talking heads on CNBC have also broached the subject.
The current consensus is that Wall Street will keep to the script of choosing a large-cap, widely-held cryptocurrency for the next crypto ETF. And Solana, which ranks as the fifth-largest crypto with a massive $77 billion market capitalization, fits the bill.
2. Meme coin mania
The next big factor is meme coin mania. There has been an absolute explosion of interest around meme coins, as some investors have turned just a few hundred dollars into $1 million or more.
Solana has emerged as the blockchain of choice for buying and selling new meme coins. As a result, activity on the Solana blockchain is soaring to new levels. People are swapping in and out of meme coins, and that's attracting new users and new attention from the crypto community.
Image source: Getty Images.
Most interestingly, this meme coin mania is starting to have real-world implications. For example, in late 2023, Solana was having trouble selling its new "crypto phone." But then it hit on the idea of giving away free meme coins with the purchase of every phone, and these phones are now flying off the shelves. Quite simply, people realized that the meme coins could be worth more than the phone itself. Whether people use the phone remains to be seen.
Or consider the world of mobile apps. You have probably downloaded a fair share of mobile apps to your phone, right? Well, the next time you do, check out the list of top mobile-app downloads. The Phantom wallet app for Solana is now getting more downloads than the Facebook mobile app, and ranks just below ChatGPT. People want the Phantom app because it gives them access to meme coins from Solana.
3. A new PayPal partnership
Even if you're not interested in meme coins, Solana's new partnership with PayPal Holdings (PYPL +1.22%) might catch your eye.
At the end of May, PayPal announced that its new stablecoin, PayPal USD, would launch on the Solana blockchain. In its press release, PayPal cited the "extremely low costs" and the "high speeds" of Solana.
That's important because crypto users -- just like everyone else -- tend to go where the costs are lowest and the speeds are the fastest. And Solana is clearly faster and cheaper to use than Ethereum, which is where PayPal originally launched its stablecoin in August.
But the uptake then wasn't that great, and PayPal is clearly hoping that Solana can help to bring the stablecoin to a wider audience. From Solana's perspective, the partnership with PayPal could unlock new commerce and payment opportunities, including peer-to-peer payments.
Solana or Ethereum?
June could be a pivotal month for Solana. The big moment of truth will come when the new spot Ethereum ETFs start trading. This could happen in June.
Some have said that this will be detrimental for any rival cryptos -- and that includes Solana -- as people go with cryptos that trade via ETF.
But this way of thinking is a bit shortsighted. For one, Solana could be getting ETFs also. Moreover, Solana seems to be really turning the corner when it comes to mainstream consumer adoption.
In May, celebrities with millions of followers (such as Caitlyn Jenner and Iggy Azalea) started to use Solana for their meme coin launches. If that trend continues, it could help it with name recognition and popular adoption.
CRYPTO: SOL
Key Data Points
And don't forget: Solana skyrocketed in value by nearly 900% last year. It has proved its ability to do that and more upside could be in the future.
So, yes, I'm convinced that Solana could be ready to move considerably higher this summer. It just needs to continue to chip away at Ethereum's dominance and gain a much wider audience of users and investors.
