Solana (SOL) has set a new all-time high (ATH) of $262, marking a historic recovery after experiencing three years of turbulent price movements. Notably, during the peak of the FTX exchange collapse and the subsequent cryptocurrency bear market, the token once fell to a low of $8.
Solana achieves historic recovery, focusing on the USDT reversal.
The highly touted 'Ethereum killer' Solana (SOL) is once again in the spotlight. After dominating the cryptocurrency bull market of 2020-21, the value of this digital asset plummeted following the astonishing collapse of FTX led by Sam Bankman-Fried. However, SOL has staged an impressive comeback over the past two years.
At the time of writing, SOL is the fourth largest cryptocurrency, reportedly with a market capitalization exceeding $123 billion. The market capitalization of the layer one blockchain is only $8 billion less than the $130 billion market capitalization of the stablecoin Tether (USDT).
Notably, SOL needs to rise a further 10% in price to decisively increase the market capitalization of USDT and become the third largest digital asset by market cap. SOL would rank just behind Bitcoin (BTC) and Ethereum (ETH) as the third largest cryptocurrency.
Given the recent price trends of the token, it is not surprising that SOL could surpass the market capitalization of leading stablecoins by the end of the year. In just the past three weeks, the token has experienced an astonishing 75% surge, rising from $148 on November 4 to $259 at the time of writing.
Despite the broader cryptocurrency market gaining momentum after the victory of pro-cryptocurrency Republican presidential candidate Donald Trump in the United States, it would be dishonest to attribute the rise of SOL solely to this.
Memecoin frenzy, increased network activity, and ETF potential boost SOL.
The remarkable transformation of SOL can be attributed to various factors that have driven increasing network adoption rates. One of the most prominent factors is the ongoing memecoin craze, which has become a dominant force in the cryptocurrency market.
Over the past year, Memecoins (especially those based on the Solana blockchain) have become a hot topic in the cryptocurrency market. In October alone, the total market capitalization of Solana-based memecoins exceeded $10 billion.
This memecoin craze has also led to increased network activity for Solana. From September to October, the number of active addresses on Solana grew by 42% month-over-month (MoM), reaching approximately 123 million.
In addition to benefiting from the memecoin narrative, Solana has also witnessed an increase in decentralized finance (DeFi) activity throughout the year. According to data from DefiLlama, Solana is home to the world's second-largest DeFi ecosystem, with a total locked value (TVL) of $9.265 billion.
Moreover, the prospects for Solana-based exchange-traded funds (ETFs) are also becoming increasingly bright. A recent report indicated that the U.S. Securities and Exchange Commission (SEC) is actively negotiating with several asset management companies to launch new spot Solana ETFs.
While SOL's new high is eye-catching, experts believe the token still has significant growth potential. At the time of writing, SOL is trading at $259, having risen 6.2% in the past 24 hours.
