The SOL token of the Solana blockchain has more than doubled this year, outperforming Bitcoin, as the project tries to move past its association with discredited former crypto mogul Sam Bankman-Fried.
(Bloomberg) — The SOL token of the Solana blockchain has more than doubled this year, outperforming Bitcoin, as the project tries to move past its association with discredited former crypto mogul Sam Bankman-Fried.
SOL is up about 125% since Dec. 31, outdoing the 78% rally in Bitcoin as well as gains in other major tokens amid 2023’s crypto rebound. Industry turmoil last year — including Bankman-Fried’s chaotic downfall — had lopped 94% off SOL.
Solana is among the blockchains vying with Ethereum, crypto’s key commercial highway, for a bigger share of digital-asset activity. But Bankman-Fried’s backing turned toxic when his FTX empire collapsed, while network breakdowns cast a shadow over Solana’s promise of speed married with lower costs.
“Solana has suffered from the FTX overhang, and the protocol suffered numerous outages,” said Markus Thielen, head of research at Matrixport. Investors are now “looking to accumulate undervalued altcoins, with Solana a key beneficiary,” he added.
Interest in Solana began recovering in January after the launch of BONK on the network. BONK is a Shiba Inu-inspired meme coin that excited the kind of inexplicable but fleeting speculative animus for which crypto is notorious.
A more sober expansion emerged in Solana’s roll out of Saga, a mobile phone customized for crypto. The device aims to provide a hardware vault for the secure keys that prove ownership of digital assets. It’s also seeks to offer easier access to blockchain-based services.
Solana is being helped by its ecosystem growth strategy and a track record whereby developers raised over $600 million in seed funding in the past two years, research firm Messari said in a recent note.
Despite recent steps, questions remain about Solana’s longer term prospects. Investors are rethinking the potential of a variety of crypto projects in the wake of 2022’s market crash and a litany of digital-asset blowups.
While SOL has surged this year, at $22 per token it’s still trading at a fraction of the $260 achieved in 2021 during the pandemic-era frenzy that lifted crypto.
SOL was little changed as of 6:55 a.m. in London on Friday. Bitcoin fell less than 1% and continues to hover around $30,000, where its rally this year has stalled.
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