Solana (SOL) exchange rate: how the price of one of the leading cryptocurrencies has changed since i
Analysts at VanEck predict that Solana could become one of the top three cryptocurrencies by capitalization as early as 2024. They also expect the imminent launch of the Solana-ETF, which will be next in line after adopting Ethereum-ETF. Let's explain how the Solana exchange rate has changed since its launch and what has influenced it.
Formative period and massive bullrun (2020 - 2021)
Solana cryptocurrency entered the market in April 2020. At the time of listing, its price was $0.95, and its capitalization was only $43 million. In terms of functionality, Solana differed little from similar blockchains with support for smart contracts technology but significantly surpassed its competitors in terms of performance: according to the developers, the network is capable of processing up to 65,000 transactions per second.
Solana appeared at an opportune time — just at the beginning of the bullish trend in the crypto market after the collapse in March 2020 against the backdrop of the stock market decline. After the April correction and the fall of SOL to $0.53, the price of this cryptocurrency began to grow and reached $1.66 by the end of the year. At the beginning of 2021, the altcoin season started, and quotes of many altcoins began to increase. In May 2021, the value of the Solana cryptocurrency first rose to $56 and then set a new all-time high (ATH) of $260, which remains valid as of September 2024.
Solana attracted users due to its high speed and low transaction costs, especially when compared to the Ethereum network, whose fees at the time reached several dollars.
Correction period and new growth phase (2022 - 2024)
After a prolonged rally and reaching ATH in November 2021, the SOL cryptocurrency rate began to fall rapidly amid the general collapse of the crypto market. By March, the price of Solana had already fallen to $85 — more than three times less than the historical maximum.
After a small rebound, when the price of Solana jumped to $132, the rate fell back to $92. In May 2022, the infamous Terra project collapsed, leading to the collapse of the native cryptocurrencies of the platform — Terra (LUNA) and TerraUSD (UST) (these tokens are now called LUNC and USTC, respectively). This event hurt the crypto market and led to the collapse of quotes of many altcoins, including SOL: after the collapse of Terra, the rate of cryptocurrency Solana collapsed in just one month from $92 to $28, that is, more than three times. Investors began to withdraw liquidity from the DeFi market en masse and, for reinsurance, to transfer funds to more stable assets, such as stablecoins. For example, the amount of blocked assets in Solana's DeFi protocols (TVL) fell from $2.9 billion to $221 million by the end of 2022, more than 13 times in about six months.
The year 2022 was generally negative for the entire crypto market: after the collapse of Terra in May, in November, the bankruptcy of one of the largest crypto exchanges, FTX, became known, leading to another wave of falling quotes of digital assets. In just one month, the price of cryptocurrency SOL collapsed from $33 to a two-year low of $9.7. The reason for such a strong fall for Solana was the news that the bankrupt FTX exchange owned SOL tokens worth $7.5 billion.
After reaching a local minimum, the rate of cryptocurrency Solana soon began to recover and had already reached $23.9 by the end of January 2023. Until October 2023, there were no significant changes in the quotes of cryptocurrency SOL. Then, the crypto market began a new phase of growth associated with investors' positive expectations regarding adopting Bitcoin-ETF. In addition, optimism was added by rumors that the bankrupt FTX exchange is preparing to restart.
In March 2024, the price of the cryptocurrency SOL reached a two-year high of $203. However, the exchange rate showed intense volatility, varying between $125 and $200. In July of the same year, the price of Solana began to correct again after information about the imminent distribution of funds among the affected creditors of the Mt. Gox crypto exchange that went bankrupt in 2014. As of September 2024, the SOL cryptocurrency exchange rate stood at $128, about half its value relative to the ATH level.
Solana has become one of the fastest-growing ecosystems in 2024, helped mainly by memcoins, which have become a trend and attracted many users to this blockchain. According to DeFi Llama, Solana's TVL has grown more than 15 times in the last year, from $312 million to $4.71 billion, making the Solana ecosystem the 3rd largest in the DeFi segment after Ethereum and Tron as of September 2024.