The two top cryptocurrencies by market cap — Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) — continue to set the pace for the overall crypto market. Right now, both are up about 45% so far this year.
But there’s one cryptocurrency that investors have largely overlooked, and that’s Solana (CRYPTO: SOL). For much of the year, Solana has been stuck near $100 — it’s up just 12% in 2024. Despite its recent lackluster performance, there are several good reasons it might end up being the ultimate altcoin to buy right now.
Solana could topple Ethereum
After a blistering 900% performance last year, Solana is now on a trajectory to “flip” Ethereum in terms of market cap. Right now, Solana has a market cap of $50 billion, while Ethereum has a market cap of close to $400 billion, so this is obviously something that is unlikely to occur in 2024. But over the long haul, it’s easy to see how the valuation gap between Solana and Ethereum might continue to narrow.
Due to its blazing fast speeds and lower transaction costs, Solana has been considered a potential “Ethereum killer” ever since it launched back in 2020. Even after The Merge upgrade, Ethereum remains relatively slow and costly to use and depends on a vast ecosystem of scaling solutions and Layer-2 blockchain networks to remain competitive against faster, more nimble upstarts.
As a result, institutional investors are now embracing the narrative of Solana as the one blockchain capable of toppling Ethereum. Notably, in late 2023, Cathie Wood of Ark Invest appeared on CNBC and talked up the merits of Solana as a faster, cheaper version of Ethereum. If you believe that the best technology eventually wins, then the smart money would seem to be with Solana, not Ethereum.
Solana has a mobile crypto strategy
In addition, Solana has the potential to grow much faster than Ethereum in the future. While Ethereum is busy grinding out incremental improvements to the performance of its base blockchain layer, Solana is creating innovative, out-of-the-box blockchain solutions that have never existed before.
A good example is Solana’s mobile crypto strategy, which was launched in the summer of 2022. One year later, Solana unveiled the Saga, the first-ever mobile phone designed for blockchain and crypto. Solana also unveiled the Solana Mobile Stack (SMS) for mobile developers, as well as a comprehensive vision for how Solana mobile apps specifically designed for the new crypto phone would make Solana the blockchain of choice for both users and developers,
The spot ETF narrative
Given Solana’s superior future growth prospects, it’s somewhat perplexing why it is lagging Ethereum in terms of performance this year. Yes, Solana had a scorching hot 2023, in which it increased in value by more than 900%, so investors could be taking a breather. And, yes, Solana had a major network outage in February that rattled investors.
But the bigger story seems to be the hype over a spot Ethereum exchange-traded fund (ETF). The growing consensus is that the first spot Ethereum ETFs could receive Securities and Exchange Commission (SEC) approval by May, at which point investors would start piling more and more money into Ethereum. In essence, the same story that we’ve been hearing about Bitcoin for the past six months would now apply to Ethereum.
But is that really the case? After all, the launch of new futures-based Ethereum ETFs met with very little investor appetite late last year. Moreover, it’s not a slam-dunk case that the SEC will actually approve any spot ETFs for Ethereum. If the SEC decision gets pushed down the road — as happened with the spot Bitcoin ETFs — then Ethereum would likely have a very hard time outperforming Solana over the remainder of the year.
How high can Solana go?
There are varying predictions for just how much higher Solana could go. In a bull-case scenario, Solana could reclaim its all-time high of $260. And, if you buy into the idea that Solana will eventually flip Ethereum in terms of market cap, then Solana might soar in value to a price of $800. Some Wall Street analysts are even more bullish on Solana’s prospects, speculating that Solana could eventually push through the $3,200 mark if it ever develops a “killer app” for its mobile phone.
All of this has me thinking that Solana might just be the ultimate cryptocurrency to buy with $100 right now. If you’re looking for a long-term play on the future of blockchain and crypto, then Solana needs to be on your radar.
Should you invest $1,000 in Solana right now?
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Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.
The Ultimate Cryptocurrency to Buy With $100 Right Now was originally published by The Motley Fool