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Solana Crypto Has Upward Potential Nearly 30%

Solana (CCC:LEFT USD) Crypto is now the sixth largest cryptocurrency with a market capitalization of $ 60 billion. This puts the rank just behind Cardano (CCC:ADA-USD) in the list of the largest cryptos according to CoinMarketCap. This capped some stellar months of performance with SOL crypto skyrocketing. I think the outlook is still bright.

Source: Shutterstock

In fact, just a few months ago, on July 31, SOL crypto was USD 34.25 per token. Now, late October 29th, it was trading at $ 199.52, just below $ 200. That is, within three months it is now 5,825 times higher.

As a result, its market value rose from $ 10.3 billion to $ 60 billion in one quarter, which is quite an achievement. While crypto is unlikely to maintain this pace, there are good reasons to believe that it can continue to do reasonably well.

Where are things with Solana

A number of developments have taken Solana to this level. Perhaps the most important one is the Total Value Locked, or TVL, statistic for Solana, which has skyrocketed. TVL measures the total dollar value of smart contracts using Solana crypto.

TVL tracks “how much money is locked up in a given protocol in the form of pools of liquidity, collateral held or simple deposits,” according to Decrypt magazine.

Decrypt websites DeFeLama Statistics measuring Solana’s TVL, which is now $ 12.69 billion as of October 29th. Compared to that ether (CCC:ETH-USD) with a TVL of $ 165 billion. That is out of a total of $ 245 billion in total TVL as of October 29th.

This may seem inconsequential as it shows that Solana only makes up 7.7% of Ethereum. But that misses the point. Solana has risen to this position as number 2 in TVL-Digital Assets in the past few months.

In fact only Binance coin (CCC:BNB-USD) has a major TVL than Solana other than Ethereum. Its TVL is $ 19.62 billion. Since Binance Coin has a market value of $ 89.8, or nearly 50% higher than Solana, that equates to its TVL, which is 54% higher (i.e. $ 19.6 billion / $ 12.7 billion).

The point is that the growth in market value seems to match the growth of the TVL of a cryptocurrency. That bodes well for Solana-Krypto as its TVL still appears to be growing significantly.

Where is Solana now?

As of July 31, the Solana TVL was $ 1.39 billion, according to DeFiLlama. It’s now up 9.13 times to $ 12.69 billion 3 months later. However, the stock price has only risen 5.8 times as I showed above.

This implies that Soalan could have significantly more upside potential. For example, if market capitalization were to increase to 9.13 times its market value as of July 31, but now only 5.825 times, we can assume it has 57% more left (i.e. 9.13 / 5.825 – 1).

Given that the market could either under or exceed this target, we can assume that it could have a range of 40 to 60% more to move higher. And only to catch up with the growth in his TVL. If Solana crypto has an even higher TVL, the growth range of its market value could be even higher.

What Solana Crypto is worth

Here’s another way to rate Solana crypto. Ethereum’s TVL is $ 165 billion, which is 67.35% of the now locked total of $ 245. Since Ethereum has a market cap of $ 517.2 billion, it means that at 100% of the TVL market share it would be $ 767.93 billion (i.e. $ 517.2 billion / 0.6735). We can use this number to estimate where the Solana crypto could go.

For example, if Solana could win a 10% market share in TVL, its market value would be 10% of $ 767.93 billion. That’s the equivalent of $ 76.79 billion. But today its market value is $ 60 billion and Solana crypto has a TVL market share of 5.18%.

So if Solana can gain 10% market share (up from now 5.18%) over the course of the next year, its market value could soar to $ 76.79 billion. That means that a 93% increase in its TVL stake will translate into a 28% increase in its market value (i.e. $ 76.79 billion / $ 60 billion -1).

What to do with Solana crypto

What I’ve shown is that Solana crypto’s market share in smart contracts, defi (decentralized finance) and other applications like NFTs (non-fungible tokens) will continue to grow and market value will also increase.

My guess is that Solana could easily go up another 28% or more over the next year if it hits a 10% market share of the total locked down value. That’s a pretty good return for most investors.

At the time of writing, Mark R. Hake was long in Ethereum, but not in any other security mentioned in the article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.

Mark Hake writes about personal finances mrhake.medium.com and runs the Guide to Total Yield Value which you can check here.

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