PriyankaWe have recently gathered an extensive list of the 12 Best Cryptocurrencies to Invest in According to Reddit, and in this article, we will delve into the position of Solana (SOL) compared to other digital currencies.
The past year has been nothing short of a rollercoaster for cryptocurrency investors. Following the approval of spot Bitcoin ETFs in the first quarter, markets took a brief period to adjust to the notion that the SEC might also greenlight spot Ethereum ETFs. This approval came in May, and the impact was monumental. In less than six months, spot Bitcoin ETFs amassed over $50 billion in combined assets, marking what some experts believe to be the most successful ETF category ever launched.
Beyond spot offerings, crypto-themed ETFs had an impressive performance in the first half of 2024. For instance, the First Trust SkyBridge Crypto Industry & Digital Economy ETF enjoyed a robust year-to-date growth of around 20%. Additionally, blockchain-focused products caught significant attention from enthusiasts, with the Amplify Transformational Data Sharing ETF surging by approximately 19% on a year-to-date basis.
In recent months, the integration of Artificial Intelligence (AI) into the crypto sphere has been notable. AI tokens, which are cryptocurrencies linked directly to AI ventures, have gained traction. These tokens support AI-based projects, applications, and services, including decentralized AI marketplaces and AI-driven decentralized autonomous organizations. Users can utilize these tokens to pay for services or access data on the platform, while platforms can leverage them as rewards to incentivize users and offer governance rights. According to CoinMarketCap, the market cap for AI and big data cryptocurrency projects witnessed a substantial increase of over 70% within weeks, signaling renewed investor confidence.
The crypto industry has faced significant setbacks, such as the collapse of FTX, which highlighted regulatory concerns. The downfall of this leading cryptocurrency exchange was largely due to a lack of regulation at the time. However, government bodies are now actively enforcing rules, with the Securities and Exchange Commission (SEC) being the most vigilant watchdog in the crypto market. CNBC reports that the US has been one of the most proactive regulators, having taken legal action against major crypto companies. Clear regulatory standards could pave the way for institutional investors, such as banks and asset management companies, to invest in crypto assets.
A bi-annual survey by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA) revealed that 22% more financial services organizations offered crypto-asset products and services to clients in 2023 compared to 2021. Additionally, 26% more institutional investors included crypto-related assets in their portfolios in 2023 compared to 2021.
Coinbase highlighted that updated second-quarter 2024 13-F filings showed a strong increase in institutional inflows into US spot Bitcoin ETFs, which they see as a “promising indicator” for the Bitcoin market. The recent filings indicated that institutional ownership of these ETFs rose from 21.4% to 24.0% between the first and second quarters of 2024.
According to the United States International Trade Commission, global revenues from tokenized asset exchanges reached approximately $26.5 billion in 2022, with about 76% of these revenues stemming from cryptocurrencies. The surge in revenues from tokenized assets in 2021 was driven by growth in non-fungible tokens (NFTs) and rising prices of major cryptocurrencies. McKinsey forecasts that total tokenized market capitalization could reach around $2 trillion by 2030 (excluding leading cryptocurrencies and stablecoins), spurred by adoption across mutual funds, bonds, exchange-traded notes (ETNs), loans, and securitization.
Globally, the cryptocurrency market capitalization surpassed $2.5 trillion, with Forbes reporting that the world’s largest cryptocurrency hit a record high of over $73,000. Its market cap reached $1.4 trillion by mid-March 2024. The cryptocurrency market is projected to grow to approximately $6.6 billion by 2024, with user numbers expected to hit 107.30 million by 2025.
The growth of the cryptocurrency market is likely driven by increased acceptance and adoption by institutions and individuals, greater use of decentralized finance (DeFi) platforms, advancements in blockchain technology, and higher usage for cross-border transactions.
Our methodology involved sifting through numerous communities, subreddits, and threads to narrow down our list to the 12 best cryptocurrencies by selecting trending ones. These were ranked based on their market capitalization as of August 29.
At Insider Monkey, we focus on stocks that hedge funds favor because our research has shown that imitating top hedge fund picks allows us to outperform the market. Our quarterly newsletter’s strategy involves selecting 14 small-cap and large-cap stocks each quarter, which has yielded a return of 275% since May 2014, outperforming its benchmark by 150 percentage points.
Solana (SOL), with a market capitalization of $67.3 billion as of August 29, is a cryptocurrency designed to function similarly to Ethereum but with enhancements. Named after a small coastal city in Southern California and created by software developer Anatoly Yakovenko, Solana tokens can be bought on most major exchanges. Their true value lies in facilitating transactions on the Solana network through its unique proof-of-history consensus mechanism that uses timestamps to define the next block in its chain.
Solana operates using a combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms. The PoH component handles most transaction processing while PoS validates each block sequence produced. Solana is primarily used for creating decentralized applications (DApps), with a focus on decentralized finance (DeFi) solutions.
Solana’s unique scaling approach positions it well for efficient blockchain solutions. It emphasizes high-speed, low-cost operations, enabling thousands of transactions per second at a fraction of the cost of other blockchains. Between September 1, 2023, and August 28, 2024, Solana’s price surged by over 600%, driven by its robust technology, network stability, and higher on-chain volumes.
Currently ranking fourth on our list of best cryptocurrencies to invest in right now, Solana holds potential as an investment. However, we believe some deeply undervalued AI stocks offer even greater promise for higher returns within a shorter timeframe. For those seeking an undervalued AI stock trading at less than five times its earnings with more potential than SOL, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
