Solana (SOL) reached an all-time high (ATH) of $262, marking a historic recovery after experiencing three years of volatile price movements. Notably, during the peak of the FTX exchange collapse and the subsequent cryptocurrency bear market, this token had once dropped to a low of $8.

Solana achieves historic recovery, focusing on the major reversal of USDT

The highly praised 'Ethereum killer' Solana (SOL) has once again become the center of attention. 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 of over $123 billion. The market cap of this layer one blockchain is only $8 billion less than the $130 billion market cap of the stablecoin Tether (USDT).

It is worth noting that SOL needs to rise a further 10% in price to decisively surpass the market capitalization of USDT and become the third largest digital asset by market cap. SOL would then rank just behind Bitcoin (BTC) and Ethereum (ETH) as the third largest cryptocurrency.

Given the recent price movements 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 experienced an astonishing 75% surge, rising from $148 on November 4 to $259 at the time of writing.

Although the broader cryptocurrency market gained momentum after the victory of pro-cryptocurrency Republican presidential candidate Donald Trump, attributing the rise of SOL solely to this would be disingenuous.

Memecoin frenzy, increased network activity, and ETF potential boost SOL

The remarkable turnaround of SOL can be attributed to several factors that have driven the continuous increase in network adoption. 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 increased network activity on Solana. From September to October, Solana's active addresses grew by 42% month-over-month, 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.

Additionally, the prospects for exchange-traded funds (ETFs) based on Solana are looking increasingly bright. A recent report indicated that the U.S. Securities and Exchange Commission (SEC) is actively negotiating with several asset management firms to launch new spot Solana ETFs.

While the new high for SOL is eye-catching, experts believe the token still has significant growth potential. As of the time of writing, SOL is trading at $259, having risen 6.2% in the past 24 hours.