Is Solana a No-Brainer Buy After the Bitcoin Halving? 📌🚨
Bitcoin (CRYPTO: BTC) has gone through four "halvings," which halved the rewards for mining the cryptocurrency, every four years since 2012. The bulls consider those events to be major catalysts for Bitcoin because they tighten up its supply.
Bitcoin's price surged 109% in the 12 months leading up to its latest halving on April 19. That rally, which was amplified by hopes for lower interest rates and the approvals of the first spot price Bitcoin ETFs this January, also lifted other cryptocurrencies.
Yet Bitcoin's price has dipped about 2% since that fateful day. That pullback suggests that a lot of investors bought Bitcoin ahead of its halving, but the lack of additional catalysts might be preventing new investors from jumping in.
So instead of focusing too much on Bitcoin right now, investors should pay more attention to other smaller cryptocurrencies that have been generating bigger gains. One of those tokens is Solana (CRYPTO: SOL), which soared 472% in the 12 months leading up to Bitcoin's halving and advanced another 8% in the following months. Is it a no-brainer buy right now?
The difference between Bitcoin and Solana
Bitcoin is mined with an older and more energy-intensive proof of work (PoW) method, while Ether (CRYPTO: ETH), Solana, and other, newer cryptocurrencies are mined with the faster and more energy-efficient proof of stake (PoS) method.
PoS blockchains support smart contracts, which can be used to develop decentralized apps (dApps), games, non-fungible tokens (NFTs), and other crypto assets. PoS tokens can also be "staked" (locked up) on the blockchain for a period of time to earn rewards. PoW blockchains are only natively used to directly mine cryptocurrencies.
Simply put, PoW tokens are valued by their scarcity, while PoS tokens are valued by the growth of their ecosystems. That's why crypto investors generally favor the PoS blockchains, which have the highest transaction speeds and the lowest fees.
