- Solana’s price jumped 10% Wednesday after Cathie Wood of Ark Invest praised it on CNBC as faster and cheaper than Ethereum.
- Solana has become increasingly popular in 2021 as an Ethereum alternative promising speed and low costs, with growing activity on liquid staking protocols.
- The rally follows the broader crypto market rebound since late October, as Solana recovers from the 70% crash after the FTX blowup last year when it was closely tied to Sam Bankman-Fried.
The price of the Solana token jumped Wednesday amid an ongoing rally in altcoins and bullish remarks on the token from famed tech investor Cathie Wood. Solana was last higher by nearly 10% at $61.36. Earlier in the day it climbed as high as 16%. It has nearly tripled in price in the past month.
Cathie Wood’s Positive Comments on Solana
The spike comes a day after Ark Invest CEO Cathie Wood applauded Solana’s performance this year on CNBC. “Solana is doing a really good job,” she told CNBC’s Squawk Box on Tuesday. “Ether was faster and cheaper than bitcoin back in the day – that’s how we got ether. Solana is even faster and more cost-effective than ether,” Wood said.
Wood went on to say on CNBC Pro Talks that she really does like Solana, while also noting that its downtime – the time the network is down under maintenance or suffering an outage – is much higher than it is for Ethereum. “People are willing to put up with that because maybe the transaction sizes are not as large or for some reason are not as important, they just want speed and cost as their top priority,” Wood told CNBC PRO. “Each one of the networks is going to have a place.”
Solana’s Growing Popularity
Solana, the sixth largest crypto token by market cap according to CoinGecko, became the darling of the crypto world in the 2021 bull market as it sold investors a vision of something like Ethereum but without the slow and expensive transactions.
Activity on Solana has been growing all year, particularly in liquid staking protocols like Jito, according to data provider Kaiko. The token has topped the list of the most traded altcoins on US-available exchanges this year, outpacing dogecoin, litecoin, Polygon’s MATIC and Ripple’s XRP.
Part of Broader Crypto Market Rally
More recently, the token is following a broader crypto market rally led by bitcoin that began Oct 24 when the coin doubled for the year and topped $35,000 for first time since May 2022. Shortly after, ether followed, rising to the key psychological level of $2,000. Historically, the altcoin rally tends to follow ether.
After Oct 24, bitcoin started losing its momentum which during bitcoin bull markets causes traders to go down the risk curve and switch to alts as a way of chasing huge profits, said Mikołaj Zakrzowski, an analyst at data provider CryptoQuant.
Recovering from the FTX Blowup
This time a year ago, the coin was facing a crucible moment after the FTX blowup sent it down 70% over two days and briefly traded under $10. FTX and its now-fallen leader Sam Bankman-Fried were widely credited with providing substantial money and resources behind the Solana project to get it off the ground.
Solana is up about 510% this year and has been one of the best-performing cryptocurrencies of 2023. By comparison, bitcoin and ether have gained about 120% and 68% respectively.
