According to December 22 data, the open-source blockchain Solana (SOL) surged 17.15 percent in 24 hours. The surge secured Solana’s position as the fourth-largest cryptocurrency by market capitalization, surpassing even Binance Coin (BNB).
The last 24 hours have also witnessed SOL surpassing Ripple (XRP) in market capitalization. According to Coingecko’s latest data, SOL confidently traded at $98.63, with a market capitalization of nearly $42 billion. The crypto saw a 26 percent surge increase in the past seven days and an impressive 67 percent growth over the last month.
Beyond market cap, Solana’s contract trading volume rose by over 32 percent, surpassing 10 billion. Meanwhile, DeFi Llama data reveal that Solana’s total value locked (TVL) has exceeded $1.3 billion. This number showcased the platform’s substantial decentralized finance (DeFi) ecosystem growth in the past two months.
Source: TradingView
‘ETH-killer chain’
Solana contracts boast a notable open interest, reaching an impressive 1.34 billion. This places Solana as the second-highest in open interest, trailing only behind crypto giants Bitcoin (BTC) and Ethereum (ETH).
Often referred to as the “ETH-killer chain” within the crypto community, the increasing influence of Solana is undeniable. Google Trends data indicates a surge in Solana searches, almost rivaling Ethereum, especially in the United States, showcasing its increasing recognition and adoption.
Even so, with a position as the fourth-largest cryptocurrency secured, Solana still faces a challenge to catch up to Ethereum’s market cap. Ethereum currently houses approximately $276 billion market cap, more than seven times larger than Solana’s.
Caution is also warranted despite Solana’s impressive recent performance. Technical analysts warn of a potential major crash before the year ends. Crypto market volatility persists, necessitating vigilance from investors and enthusiasts.
Ethereum’s bold projection
Significant figures like BitMEX co-founder Arthur Hayes are also unfazed by Solana’s remarkable rally. On Friday, Hayes disclosed selling his SOL holdings and reallocating funds to Ethereum. This move aligns with a broader trend, as Solana surged 700 percent since New Year, with a five-fold increase in the last two months.
“Fam … I have a confession to make,” Hayes wrote on his X account. “I received a msg from the Lord while meditating. He said dump that Sam coin POS, and profess your love for Archangel Vitalik. So I dumped $SOL, and bot more $ETH.”
Hayes also predicted Ethereum’s price would reach $5,000, a significant stretch of over 100 percent from its current value of $2,285. Social media users found his projections surprising, with some expressing doubt about Ethereum’s potential to surge to such heights in a short time.
Some observers suggested that the next bullish phase could see Ethereum reaching $2,400, driven by increased institutional investment. Ethereum has demonstrated a strong performance this year, surging 93 percent year-to-date after a 55 percent decline in 2022, attributed to bearish sentiments among institutional investors due to macroeconomic factors.
Despite Ethereum’s slower growth in the first two quarters of 2023, contrasting Bitcoin’s significant institutional inflow, the outlook remains positive. While Bitcoin attracted substantial institutional investment, Ethereum experienced outflows in its products, even with the anticipation of the future ETF.
Total inflows to Bitcoin funds stand at $1.6 billion, while Ethereum surpassed $10 million with slight gains in Q4. Wealth management firms surveyed on the future of crypto assets continue to support Ethereum.
The firms cited favorable market indexes and the altcoin’s slow recovery from a bear market, leading to a 55 percent loss in value. Additionally, they pointed to staking on various platforms as a bullish narrative driving inflows in the coming months.