It might come as a surprise, but Solana (SOL -2.43%) is now the top-performing major cryptocurrency during the past 30 days. During that time period, Solana is up a robust 22%. By way of comparison, market bellwethers Bitcoin (BTC -0.41%) and Ethereum (ETH -2.31%) are little changed.
It's all lining up for what some investors are already calling "Solana Season" -- a spectacular year-end rally that ends with Solana topping the $300 price mark. Here's why that could be a reality.
New Solana ETFs
First and most importantly, new spot Solana exchange-traded funds (ETFs) are due to start trading sometime in October. The Securities and Exchange Commission (SEC) is expected to rule positively on a handful of spot Solana ETF applications, with Bloomberg currently estimating the chances of approval at 95%.
Once these spot Solana ETFs start trading, they could lead to new money from institutional investors cascading into Solana. Earlier in the year, JPMorgan Chase predicted that anywhere from $3 billion to $6 billion might flow into Solana as soon as they're available.
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The new ETFs will create a source of consistent long-term demand for Solana. It's difficult to predict how much of this new demand has already been priced into Solana, but there's certain to be at least some upward pressure as Solana becomes an increasingly mainstream cryptocurrency.
The emergence of Solana treasury companies
Another exciting development is the emergence of new Solana treasury companies. These companies, just like their Bitcoin treasury company counterparts, do just one thing: raise capital from outside investors, and then immediately plow that money into purchases of a specific cryptocurrency.
Right now, there are several different companies that have raised hundreds of millions of dollars in new capital solely to buy Solana. The heavyweight here is Forward Industries, a former medical design firm, which raised a mind-boggling $1.6 billion to scoop up Solana. The goal of Forward Industries, quite simply, is to become the world's foremost Solana treasury company.
More Solana treasury companies could be on the way, especially if the price of Solana continues to rise. It remains to be seen, of course, how much staying power these new treasury companies will have. If the price of Solana stalls out or declines, they may no longer be able to raise new capital from investors.
Nonetheless, they are a strong catalyst for sending Solana much higher during the short term. In fact, Solana's stellar performance over the past month can be directly attributed to the emergence of these Solana treasury companies.
Solana as a DeFi powerhouse?
At the same time, the Solana blockchain ecosystem appears to be revving up for more growth. The standout area here is decentralized finance (DeFi). For example, Solana recently surpassed Ethereum in terms of total overall trading volume on decentralized cryptocurrency exchanges. Generally speaking, this is a positive signal, since it leads to new fee income for blockchain ecosystem participants, and stimulates greater demand for the cryptocurrency being used to pay those fees (in this case, Solana).
Admittedly, some of this growth in trading volume may be due to meme coin speculation, which is hardly a recipe for sustainable growth. However, signs are pointing to increased usage of the superfast Solana blockchain by traditional financial market participants. At the same time, Solana is stepping up its game when it comes to interoperability and integration with other blockchains.
How much higher can Solana go?
Based on its current price of about $235, a rally to the $300 price level implies a gain of 25% to 30% for Solana. That could actually be on the low side of what Solana is capable of achieving over the long haul. If Solana ever lives up to its early billing as an Ethereum killer, it might end up being worth $500 billion or more. That would imply a price of nearly $1,000 for a single Solana coin.
As a result, I'm bullish on Solana over both the short and long term. All the positive signals are lining up for a strong year-end rally. Within a year, I fully expect Solana to be a $300 cryptocurrency.
