Is SOL a Good Investment? (2025)

Why is SOL a good investment? 

Here are some of the reasons why you should consider investing in SOL: 

• Exceptional speed and scalability: Solana maintains 65,000 transactions per second (TPS) which is significantly faster than most blockchains . This exceptional speed makes Solana great for applications requiring high throughput including DeFi trading, memecoins and gaming applications. 
• Minimal transaction costs: The average transaction fee on Solana remains at $0.00025, one of the lowest across all major blockchains. Low fees are part of the reason why Solana has become a popular choice for memecoins.
  Strong DeFi ecosystem: Solana's DeFi TVL (total value locked) increased 32.7% quarter-over-quarter to $11.5 billion in Q3 2025. Today, Solana is the 2nd-largest network for DeFi, behind Ethereum. Popular apps include Kamino, Jupiter, and Raydium.
• Institutional adoption and regulatory clarity: Solana gained significant institutional validation when President Trump announced that SOL would be part of the U.S. crypto strategic reserve. In addition, Fidelity filed for a Solana ETF to be listed on the NYSE, and VanEck launched its VSOL Solana ETF for trading, providing regulated access for traditional investors.
• Growing network activity: Over 2 million daily active wallets are transacting on the Solana network in Q1 2025. Stablecoin market cap on Solana grew 36.5% quarter-over-quarter to an all-time high of $14.1 billion, with USDC reaching $10 billion. As more users and developers join the ecosystem, the network becomes more valuable for everyone, creating positive feedback loops.
• Strong holder commitment: Solana reported around $7.4 billion staked, representing approximately 69% of supply. This high staking ratio demonstrates strong commitment from holders who believe in the network's long-term potential and are willing to lock tokens to secure the network.

Solana's market cap sits at above $70 billion, ranking it 7th among all cryptocurrencies. 

What is SOL?

Solana is a high-performance blockchain platform designed to support decentralized applications, smart contracts, and DeFi protocols without requiring Layer 2 scaling solutions (blockchains built on top of the network to enhance performance, used by Ethereum and other competitors). 

Solana launched in March 2020 and has grown into one of the largest cryptocurrency ecosystems by market capitalization and developer activity.

How does Solana work? 

The Solana protocol uses a unique proof-of-history consensus, which combines Proof of Stake with a unique timekeeping mechanism. This architecture dramatically speeds up transaction processing, because the network doesn't need validators to communicate back and forth to agree on time. 

What is SOL?

SOL is the native cryptocurrency of the Solana blockchain. The token serves multiple purposes within the ecosystem: SOL can be used to pay transaction fees, vote on governance decisions, and earn staking rewards. 

What are the risks of investing in SOL?

• Extreme volatility: Like other cryptocurrencies, SOL is highly volatile. SOL fell from $260 in November 2021 to under $8 by the end of 2022, a decline of more than 94%. 
• Network reliability concerns: Solana has experienced major network outages in the past. While network stability has improved significantly in recent years, past outages damaged trust in the blockchain. 
• Centralization concerns: Critics have argued that Solana is more centralized than competing blockchains, with a smaller validator set and higher hardware requirements to run nodes. Running a Solana validator requires expensive hardware and high-bandwidth internet connections, which limits the number of independent validators. Currently, Solana has more than 3,000 validators (compared to more than 1 million for Ethereum). 
• Intense competition: Solana faces intense competition from Ethereum Layer 2 solutions, which have dramatically reduced fees while maintaining Ethereum's security and decentralization. Platforms like Arbitrum, Optimism, and Base offer low fees and fast speeds comparable to Solana. 

How does SOL compare to the competition? 

Let’s compare Solana to its biggest competitor: Ethereum. 

SOL vs. Ethereum

Ethereum is the largest smart contract platform, commanding over $90 billion in DeFi TVL and hosting the majority of DeFi protocols, NFT marketplaces, and decentralized applications. Ethereum pioneered smart contracts and benefits from its strong community of users and developers. 

The primary difference is performance. Ethereum processes around 15-30 transactions per second with fees that can reach several dollars during network congestion. Solana processes 65,000 transactions per second (TPS) with fees under a penny. This makes Solana a better choice for applications requiring fast speeds. 

However, Ethereum offers greater decentralization and a longer track record of security. Ethereum's transition to Proof-of-Stake and development of Layer 2 solutions have improved its scalability. That’s part of the reason why Ethereum continues to dominate the decentralized app ecosystem. 

SOL's Advantages

Solana's main advantage is its ability to offer Ethereum-level functionality without requiring Layer 2 solutions. Developers can build high-speed applications like crypto games without worrying about fee spikes during high-demand periods. 

Where SOL Struggles

Solana sacrifices some decentralization for performance. Running a Solana validator requires expensive hardware and high-bandwidth internet connections, which means it has fewer validators than other blockchains. 

The network's history of outages, while improved in recent years, remains a concern for some users. 

SOL historical performance 

SOL has experienced multiple boom-and-bust cycles since its launch.

Early Days (2020-2021)

Solana was officially launched in March 2020 by the Solana Foundation. 

The network's speed and low costs began attracting developers seeking alternatives to Ethereum's high fees, especially as DeFi and NFTs became more popular. 

Solana soared over the course of 2021, with its price going up 12,000% for the year and reaching $250 by November. This explosive growth made SOL one of the best-performing cryptocurrencies of the time. Much of Solana's popularity was built around growing interest in NFTs due to the network's low minting costs and fast transaction speeds.

However, Solana’s technical issues damaged confidence in the network's reliability. In May 2022, Solana experienced a seven-hour outage. 

The 2022 FTX Collapse

When the then-popular cryptocurrency exchange FTX collapsed in November 2022, investors fled Solana to the tune of about $8 billion. By the end of 2022, SOL had plunged to a price of nearly $8, down more than 94% from its peak.

Sam Bankman-Fried, the founder of FTX, held nearly $1.2 billion worth of SOL through his companies. It was estimated that this constituted 10-15% of the total supply of SOL at the time. When FTX collapsed, so did the price of SOL. 

Two of the biggest NFT projects built on Solana announced their migration off the platform on Christmas Day 2022. Some critics questioned whether Solana could survive. 

The 2023-2025 Recovery

SOL started recovering in December 2022. 

Recovery was driven by airdrops from protocols like Pyth and Jito, which distributed $290 million in combined value to Solana users in November 2023.

In November 2024, Solana finally broke its all-time high price record, setting a new milestone above $260. The jump came following Donald Trump's U.S. presidential election win (and the surge continued after the release of his personal memecoin, $TRUMP, on Solana). 

SOL's one-year surge from November 2023 to November 2024 stood at 386%, more than quadrupling in value during that span. This significantly outperformed Bitcoin and Ethereum over the same period, demonstrating Solana's ability to generate strong returns in bull markets. 

What’s a good price prediction for SOL? 

Making accurate cryptocurrency price predictions is difficult. The crypto market involves complex dynamics influenced by multiple factors that are hard to forecast with certainty.

Rather than betting on specific price targets, consider the fundamentals. Is Solana still processing millions of transactions daily at low cost? Are developers continuing to build valuable applications on the network? Is institutional adoption increasing? Remember, these are the factors that will drive price growth. 

How do I buy SOL? 

Solana is available on major exchanges including Coinbase, Kraken, Gemini, and Binance US.

Step 1: Create an account: Choose a trustworthy exchange and complete the signup process. Provide your email address, create a secure password, and agree to the platform's terms of service.

Step 2: Verify your identity: Exchanges require identity verification to comply with regulations. Upload a government-issued ID and other personal information. This process typically takes 24-48 hours. 

Step 3: Link a payment method: Connect a payment method like bank transfers to get started buying SOL and other cryptocurrencies. 

Step 4: Buy SOL: Search for SOL on your exchange, enter the amount you want to purchase, and confirm your order. You can place a market order to buy immediately at the current price or a limit order to specify the price you're willing to pay.

Conclusion

Solana has established itself as one of the leading smart contract platforms, offering exceptional speed and low costs that attract developers and users. 

Solana has recovered remarkably from the FTX crisis, hitting new all-time highs. Soon, SOL will be held by the US government in the strategic reserve. 

However, SOL remains highly volatile and faces tough competition from other smart contract blockchains.