What to Know
- Bitwise CIO Matt Hougan is extremely bullish on Solana.
- He likened Solana’s upcoming price trajectory to that of Bitcoin and Ethereum after the launch of spot ETFs.
- Hougan also spotlighted growing institutional interest in Solana as companies are establishing SOL treasury strategy.
Bitwise Chief Investment Officer (CIO) Matt Hougan thinks Solana may be just starting a larger rally in recent weeks. Already up 24% in the last month, SOL stands to enjoy the factors that have already enabled major returns in other top cryptocurrencies. Hence, Hougan believes that the Solana Season could be the next stop.
Bitwise CIO Outlines Reasons For Expected Surge in Solana Price
As Hougan commented, the same mix that started Bitcoin and Ethereum in the last few cycles is emerging for Solana. “For the last 18 months, the recipe for strong returns in crypto has been clear. Take one part of ETP inflows, add strong corporate treasury purchases, and voilà — you get big returns,” he stated in a memo. Hougan added that this trend played a key role in catapulting Bitcoin out of the $40,000 range and allowed Ethereum to increase its value more than threefold.
The Solana backdrop is starting to belong to that formula. Bitwise and other asset management firms, such as Grayscale, Fidelity and VanEck have all filed applications to launch Solana exchange-traded funds as spot products. By October 10, the U.S. Securities and Exchange Commission should furnish a ruling on such filings. The fact that at least a portion of the proposals would be approved would open the doors of the institution players and individual investors investing in Solana via mainstream investment vehicles.
There is also momentum that has come out of the ETF arena. On the weekend, a comparatively unknown publicly traded company, Forward Industries (NASDAQ: FORD), announced it had obtained the support of major players in the crypto investment sector, including Galaxy Digital, Jump Crypto, and Multicoin Capital. The stated plan of the company is to invest directly into Solana – buying the token, staking it, and getting a yield, thus turning Solana itself into a revenue-making line item on its balance sheet.
Forward’s strategy is directly connected with the name of the co-founder of Multicoin Capital and long-term Solana advocate, Kyle Samani who recently acquired a leading position within the company. Hougan made comparisons of the appearance of Samani with other high-profiled persons who contributed to the magnification of the stories of various assets in the past. He characterized Samani as holding a comparable role to Michael Saylor in Bitcoin or Tom Lee in Ethereum, and as a figure who is “visible, vocal, and capable of turning a technical narrative into a mainstream headline.”
Solana still derives its main strength through technical design. Solana is a single chain as opposed to Ethereum, which uses more scaling layers. It will soon be able to cut its transaction finality to as little as 150 milliseconds with a software update. The expenses are also kept at a low level, at less than a cent in network charges.
How SOL Could Mimic BTC, ETH’s Recent Rally
The architecture is, however, associated with tradeoffs. Hougan admitted that the opponents mentioned the problem of centralization and the possible susceptibility to downtime. Proponents, however, claim that Solana is uniquely efficient to support large-scale applications such as stablecoins and tokenized real-life assets. Present data highlights that trend: Solana is ranked third among blockchains in stablecoin liquidity and fourth in tokenized assets with a total asset volume increasing 140% this year.
Another factor that Hougan emphasized is size. The market capitalization of Solana is a mere $116 billion compared to the market capitalization of Bitcoin ($2.2 trillion) or Ethereum ($519 billion), and this difference increases the impact of inflows of investment. He used Forward Industries and its purchase plan of 1.65 billion dollars to demonstrate the difference between the purchase and the effect of an inflow of Bitcoin of $33 billion.
It is on this background that Hougan pointed out that the conditions of Solana are converging towards what has resembled previous breakouts in other major tokens. “My suggestion? Keep your eye on Solana,” he concluded.
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