While most altcoins are correcting, Solana (SOL) continues to skyrocket. Obviously, institutionalists paid attention to it. But, perhaps, the Fear of missing out (FOMO) works.
The SOL Rally lasts almost since the beginning of the year, with a break for the summer months. In February, Solana was ranked 42nd in the Coinmarketcap ranking in terms of capitalization. Now the SOL cryptocurrency is competing with Ripple (XRP) and is ready to surpass one of the leaders of the cryptocurrency market.
The Solana platform is created by former Qualcomm staff, a company known as the creator of processors and wireless solutions. Co-founder Anatoly Yakovenko is obviously of Russian origin, but he was educated in the United States. The SOL token was represented in 2020, but until this year it was only one of the altcoins in the middle of TOP-100.
By May 2021, SOL had grown 25 times since February, from about $2 to over $50. Then 2 months of horizontal dynamics followed. The explosive growth began at the end of July when institutionals became interested in platforms for DeFi and NFT. As it turned out, the creators of Solana could provide high performance of their blockchain without resorting to Layer-2 solutions, sidechains, or sharding. Solana works initially on the Proof-of-Stake consensus, the leading altcoin Ethereum is just transitioning to it, and this is not as quickly as application developers like.
But more importantly, the creators of Solana also use the Proof-of-History consensus, which significantly speeds up transaction confirmation and increases network performance and scalability. This was appreciated by big investors and they started to invest in products on the Solana platform. According to the investment firm CoinShares, for several weeks in a row, Solana has been the leader in the dynamics of money inflow from large funds.
A CoinShares report over the past week notes that Ethereum still leads as for investment shares, with ETH accounting for $14.4 million, but that’s 16% less than a week ago. And the inflow of funds to SOL grew by 388% over the week and amounted to $13.2 million, the price of SOL increased by 37% for this period.
According to CoinShares, $25 million have been invested in Solana instruments since the beginning of the year. CoinShares also notes that over 17 weeks of observation, a whole 14 weeks, there has been an outflow of funds from bitcoin. Now funds have begun to return to bitcoin. Researchers have determined that $62.5 billion is locked in total assets under management (AUM). The record level of cryptocurrency AUMs was in mid-May and amounted to $66 billion.
Retail investors are following the institutional investors into SOL, but perhaps they are late. Three weeks of fast rise should be followed by a correction, and the current growth of 30% per day highly likely reflects the Fear of missing out (FOMO). Retail long-term investors should wait for the SOL correction to buy at around $130. The current price of about $190 indicates that the asset is overbought.