From a performance perspective, Solana (SOL +2.70%) checks all the boxes for a blockchain network, providing stability, low costs, and speed. Its network has delivered 100% uptime for 18 months and counting, including in January, when it had the highest level of activity ever recorded by any blockchain.
Transaction fees on Solana are normally under $0.01. It's also one of the fastest blockchains, processing over 1,000 transactions per second (tps), and it recently hit 100,000 tps in a brief experiment.
Solana hasn't delivered much of a return on the year, but that could change in the near future. Here are the tailwinds that could take it to the next level, and whether a $500 price is realistic before 2026.
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Solana ETF approval could happen this year
Several fund managers have submitted applications for spot Solana exchange-traded funds (ETFs). The Securities and Exchange Commission (SEC) has set a deadline of Oct. 16, 2025, to review proposals for two of them, from Bitwise and 21Shares.
The expectation is that SEC approval happens this year. A Solana-staking ETF received approval to trade in the U.S. last month. It provides exposure to Solana and allows investors to receive staking rewards through dividend payouts. Many investors and analysts have taken this as a sign that approval for spot Solana ETFs is imminent -- on Polymarket, the odds of it happening in 2025 are above 99%.
ETF approval can be a game changer for cryptocurrencies. It provides an easier way to invest, without needing to go through a crypto exchange or set up a crypto wallet. It also adds legitimacy for a cryptocurrency as a financial asset.
The price of Bitcoin has increased significantly since the approval of spot Bitcoin ETFs on Jan. 10, 2024. It's up 152% since then (as of Aug. 18), and Bitcoin ETFs have received inflows of about $55 billion.
Multiple rate cuts may be on the horizon
Most economists are forecasting that the Fed will cut interest rates in September, and possibly one more time before the end of the year, according to a poll by Reuters. When interest rates decrease, investors generally seek out higher-yielding assets for their money, since bonds and deposit accounts pay less.
For that reason, rate cuts can be beneficial for stocks and cryptocurrencies. They drive more money to these markets, leading to higher prices. Solana would likely be one of the coins that gains value after a rate cut, considering it's among the largest cryptocurrencies by market cap.
Solana is well-suited for tokenized RWAs
One of the more exciting recent cryptocurrency developments is tokenized real-world assets (RWAs). Developers are bringing digital token versions of real physical and financial assets to blockchain networks. For example, there are tokenized versions of U.S. government bond funds and popular stocks, including Nvidia and Apple, on Solana's blockchain. There's now nearly $15 billion in RWA value on blockchains, up 9% over the last 30 days.
The hope is that tokenization makes RWAs accessible to more investors and increases liquidity. We're not there yet -- most of the tokenized stocks on Solana have less than $10 million in total on-chain value and fewer than 10,000 holders, so these are still small markets. But this could potentially bring trillions of dollars to blockchain networks over the years.
Among all blockchains, Solana is currently third by number of RWA holders and fifth by total RWA value ($499 million). If RWAs take off, Solana could become a hot spot because of its cheap fees and transaction processing speed.
CRYPTO: SOL
Key Data Points
Will Solana hit $500 this year?
Solana is currently trading at $182, meaning it would need to nearly triple to reach $500. As an investor, I'd be thrilled, but I don't see it happening in 2025.
There are multiple potential growth catalysts coming up, including a high probability of ETF approval and interest rate cuts. RWA activity could also keep ramping up. If everything breaks well for Solana, it can close out the year strong. But $500 feels like a stretch. I wouldn't be surprised if it ends up between $225 to $250, or possibly even $300.
Regardless of how Solana does over the next five months, I think it's a great long-term crypto investment. However, it's also highly volatile. If you're going to invest, the safest approach is to only make crypto a small part of a diversified portfolio.
