The cryptocurrency Solana (CRYPTO: SOL) has experienced a tumultuous journey since its debut in early 2020. Initially priced under $1 per coin, it skyrocketed to $259 during the 2021 cryptocurrency surge, but then plummeted below $10 by December 2022. In 2024, Solana has generally mirrored Bitcoin’s (CRYPTO: BTC) movements, closely following its trends. As of December 18, one Solana coin was valued at $202:

Solana price data sourced from YCharts

That’s all part of the past, and now we need to focus on what 2025 and beyond might hold. Should you invest in Solana, avoid it as being too pricey, or consider it a sensible option if you already own some?

Solana’s turbulent past

The significant price fluctuations in recent years had causes. When the FTX trading platform collapsed dramatically, it held a substantial quantity of Solana tokens, which complicated matters. This led to a rapid decline in investor confidence, made worse by a financial crisis and a downturn in the crypto market.

Rebuilding that trust took time, even though Solana was not directly responsible for FTX’s issues. Nonetheless, the cryptocurrency boasts appealing features that attracted many app developers to incorporate it into new projects. It enables smart contracts similar to Ethereum (CRYPTO: ETH), but executes these contracts quicker and with lower fees—a key factor in overcoming the fallout from the FTX scandal.

A year ago, developer enthusiasm hit a tipping point, leading to a surge in transaction volumes and fees. There was a temporary lull during summer, but since then, Solana’s usage has spiked consistently, reflected in rising average daily transaction numbers.

This indicates that users seem to have moved past the negative association with FTX, embracing Solana for its applications in blockchain-based solutions. It’s becoming a popular platform for stablecoins and non-fungible tokens (NFTs), while its swift transaction capabilities make it suitable for everyday payment systems. While you may not have noticed these blockchain tools yet, their popularity is quietly rising as consumers, businesses, and regulators become more familiar with cryptocurrencies.

Ambitions of the Solana project

Often deemed as an “Ethereum killer,” Solana is capable of accommodating numerous projects centered around smart contracts. The Solana Foundation envisions the coin as a central component of the forthcoming Web3 concept, which aims to empower individuals to take control of their online experiences away from big tech companies.

Rather than “killing” the original smart contracts framework, Solana’s advocates aspire to secure a significant share of future app development by competing vigorously with Ethereum and others.

The surge in usage metrics indicates that Solana is on a path toward long-term success. Although there are many high-performing cryptocurrencies available today, and even Ethereum has improved its transaction speeds recently, Solana’s platform combines speed, security, and a supportive developer community effectively.

Final assessment: Now might be the right time to invest in Solana

This cryptocurrency is not going anywhere. Solana has cultivated a strong user base and an impressive market position. As per CoinMarketCap, Solana ranks as the sixth most valuable cryptocurrency, boasting a market cap of $99 billion. This positions it similarly to well-known companies like Starbucks (NASDAQ: SBUX) and Altria (NYSE: MO). Quite remarkable for a four-year-old project that has already weathered a major value collapse.

Solana’s value has doubled over the past year, although it has lagged behind Bitcoin recently. This underperformance can largely be attributed to investors stepping back from risky high-growth assets at this moment. The enthusiasm for artificial intelligence (AI) is waning, and regulators are acting to prevent another inflation-fueled crisis.

Such concerns in the market are very real, and anyone considering investing in or holding Solana should acknowledge them. Nevertheless, this bearish sentiment may not persist for long, and many cryptocurrency investors believe that leading digital currencies will continue rising in 2025. Additionally, concepts surrounding Web3 are gaining traction daily, and if they materialize into successful applications, Solana is likely to benefit significantly.

Unless you believe all cryptocurrencies are fundamentally worthless, you should consider Solana. However, if that were the case, you likely wouldn’t have read this far. Therefore, I suggest taking a deeper dive into Solana’s technical specifications and its role within the cryptocurrency landscape. This exploration may encourage you to acquire a few Solana tokens.

The Motley Fool is partnering with YSL News to offer financial news, analysis, and insights designed to empower individuals in their financial decisions. Its content is created independently of YSL News.

Is it wise to invest $1,000 in Solana at this moment?

Recommendation from the Motley Fool: Before purchasing Solana stocks, consider this:

The Motley Fool Stock Advisor analyst team has pinpointed what they believe are the 10 best stocks for investors to consider right now, and Solana is not included on that list. The selected 10 stocks have the potential to deliver significant returns in the upcoming years.

Stock Advisor offers a straightforward strategy for investors aiming for success,

This includes advice on creating a portfolio, ongoing insights from analysts, and two new stock suggestions every month. The Stock Advisor service has achieved a return that is over four times greater than the S&P 500 since 2002.