By George Ward
Following recent developments in the Solana ecosystem, the network’s native crypto, SOL, has become the fourth-largest cryptocurrency by market capitalization, surpassing Binance Coin (BNB). Solana’s market capitalization stands at about $91.3 billion, outranking BNB’s $83.5 billion, according to the latest data from CoinMarketCap.
This development spotlights Solana’s growing dominance in crypto and its potential to challenge leading cryptocurrencies, notably ETH.
What’s Causing SOL’s Meteoric Rise?
Solana’s meteoric rise is attributed to several key factors. First, the cryptocurrency has witnessed significant accumulation by institutional investors, signaling confidence in its long-term potential. Additionally, Solana has demonstrated robust on-chain metrics, indicating increased usage and a thriving ecosystem.
Moreover, Solana has emerged as a prominent player in the decentralized finance (DeFi) sector, attracting over $4 billion in investments to its DeFi protocols. These investments underscore Solana’s growing importance as a platform for decentralized applications (dApps) and financial services.
After overtaking BNB, many investors believe SOL has the potential to challenge ETH for the second spot. Ethereum, currently the second-largest cryptocurrency by market capitalization with $430.2 billion, has long grappled with scalability issues and high transaction fees, hindering its widespread adoption and usability.
While the recent introduction of the Dencun Upgrade addressed Ethereum’s scalability challenges, doubts linger over its effectiveness, especially as competing platforms like Solana offer better scalability with lower transaction costs. Moreover, data from DefiLlama indicated that Solana had surpassed Ethereum in total decentralized exchange (DEX) volume, indicating its growing prominence in the DeFi space.
Has SOL Survived The Bankman-Fried Curse?
Moreover, these developments suggest that SOL has overcome the industry tagged “Sam Bankman-Fried curse.” Before being convicted, SBF and his affiliated companies held significant SOL holdings.
Consequently, when the FTX collapsed, SOL’s price declined sharply. Hence, SOL’s price recent climb to over $200 suggests it may have overcome the curse. Furthermore, all Solana-related projects are experiencing growth, especially in total value locked, trading volume, and user engagement.
Notably, its meme coin sector, featuring tokens like Myro (MYRO), dogwifhat (WIF), and Book of Meme (BOME), has garnered considerable attention. Furthermore, Google Trends data reflects a surging interest in Solana, surpassing previous highs from late 2021.
Whales Unload $40 Million SOL Tokens In 48 Hours
Amidst the euphoria surrounding SOL’s price exceeding $200, a whale, known only by the pseudonym “BU6N2Z,” has shed 200,000 SOL in the last 48 hours. This sale worth approximately $39.85 million happened on the Binance platform.
Despite this sizable divestment, the mysterious whale still holds 1.62 million SOL, valued at $323 million. Furthermore, the whale has 1.23 million SOL (equivalent to $246 million) staked.
Solana’s Growing Dominance
The timing of this whale activity aligns with Solana’s remarkable surge in value over the past week. Commencing at $136.49, SOL rose to breach the $200 threshold for the first time since November 2021. This surge, nearly 40%, has propelled Solana’s on-chain trading volume to unprecedented levels, surpassing its layer-2 counterparts, including Avalanche and Optimism.
As Solana continues to make waves, the question is, will the whale divestment dampen SOL’s momentum, or will it be a blip in its upward trajectory? At the time of writing, SOL is up 6.3% in the last 24 hours and trades at about $205 per Coinmarketcap data.