Update Jan. 9, 11:52 am UTC: This article has been updated to include a paragraph on Solana’s market capitalization compared to BTC and ETH.
Solana is positioned for another year of significant growth in 2025, driven by increasing interest from retail investors and anticipation of a US-based Solana exchange-traded fund (ETF).
Solana (SOL) fell below the key $200 psychological mark on Jan. 9 after logging a more than 7% weekly decrease, Cointelegraph Markets Pro data shows.
SOL/USD, 1-month chart. Source: Cointelegraph
Despite the current correction, Solana is poised for a year of significant financial returns, which will mainly be driven by retail investors’ profit expectations, Nicolai Søndergaard, research analyst at Nansen, told Cointelegraph during an exclusive interview at the Emergence Prague 2024 event.
“[Solana’s appeal] is the function of expected profits. It’s that Solana seems cheaper. If you’re looking at a unit, you just think this is cheaper to buy,” Søndergaard said.
New retail investors often make the mistake of using a cryptocurrency’s per-unit price to determine its value and future potential, which is much more dependent on the coin’s market capitalization.
This misconception often makes tokens like Solana more appealing to retail, as its price tag enables them to acquire an entire coin for around $200, which would only buy investors a fraction of Bitcoin (BTC) or Ether (ETH).
However, a token’s market capitalization may provide more accurate information on the token’s total value, its adoption compared to other cryptocurrencies and its potential price volatility.
Solana’s market capitalization was $92 billion at the time of writing, more than four times smaller than Ether’s $397 billion and nearly 20 times smaller than Bitcoin’s leading $1.8 trillion market capitalization
Increasingly more analysts expect Solana’s price to surpass $400 based on historical chart patterns and growing anticipation for the first US-based spot Solana ETF.
Related: 3 crypto predictions going into 2025: SOL ETFs, AI trading, new threats
SOL ETFs await approval by the end of January 2025
The crypto industry could see the approval of the first Solana ETFs by the end of January, shortly after President-elect Donald Trump’s inauguration on Jan. 20.
At least five companies are vying for a spot Solana ETF, including asset management giants VanEck, Grayscale, 21Shares, Bitwise and Canary Capital.
The deadline for Grayscale’s Solana ETF application is Jan. 23, while the four other applicants expect a preliminary decision by Jan. 25, 45 days after the SEC formally accepted the ETF application for review in November 2024.
A US Solana ETF may offer greater accessibility for traditional investors who don’t have an account with a centralized exchange (CEX) and want some exposure to SOL, explained the analyst.
Nansen’s Nicolai Søndergaard, interview with Cointelegraph’s Zoltan Vardai
While a Solana ETF is highly likely for approval during 2025, the timeline remains the main question for crypto investors, according to Nansen’s Søndergaard:
“The question is if it’s going to take a lot of iterations before it goes through, similar to what happened with BTC and ETH. But I think it’s definitely happening in 2025.”
Related: Bitcoin price dip to $92.5K caused by Fed interest rate concerns: Analyst
Brazil’s first Solana ETF was approved on Aug. 7, setting a precedent for other global jurisdictions.
Solana climbed back above $230 on Dec. 11, fueled by growing trader anticipation for a SOL ETF, along with Bitwise setting a $750 price target. Solana was trading above $191 as of 10:08 am UTC on Jan. 9.
Magazine: Ether may ‘struggle’ in 2025, SOL ETF odds rise, and more: Hodler’s Digest, Dec. 29 – Jan. 4
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.