VanEck predicts Solana price could hit $520 by year-end

U.S. investment manager VanEck forecasted that Solana's price could reach $520 by the end of 2025. “Using an autoregressive (AR) forecast model, we estimate Solana’s market cap will reach ~$250B, implying a SOL price of $520 based on ~486M floating tokens,” VanEck said in a Thursday post on the social media platform X.According to The Block’s crypto price page, Solana is trading at $195.5 — falling 3.5% in the past 24 hours. A target of $520 means that the token's price would increase by 165% this year. In the last 12 months, Solana has risen by 102%. It is the fifth largest cryptocurrency, with a market capitalization of $94.1 billion.“We value Solana (SOL) based on its projected year-end market share within the smart contract platform (SCP) market,” VanEck said. “Our SCP market cap forecast is derived from U.S. M2 money supply growth, given its strong historical correlation with crypto market capitalization.” M2 measures the U.S. money supply — encompassing cash, checking deposits, and readily convertible near-money, such as savings and money market accounts.VanEck analysts have made lofty and unrealistic price predictions in the past. In 2022, VanEck senior analyst Patrick Bush predicted Cosmos’s native token ATOM could hit $1400 by the end of 2030. Later, the report scaled back the prediction to $140 in an updated report. ATOM trades at $4.5, down more than 55% since the report was published a few years ago.The investment firm said in its latest report it projects the U.S. M2 to hit $22.3 trillion by the year-end with a 3.2% annualized growth rate, while the smart contract platform market is expected to expand 43% to an all-time high of $1.1 trillion during the period from $770 billion today. In the meantime, Solana’s share of the SCP market capitalization is predicted to grow from 15% to 22%, VanEck said. “This projection is supported by Solana’s developer dominance, increasing market share in DEX volumes, revenues, and active users,” the company said.The Solana blockchain has experienced significant growth over the past year, fueled partly by the enduring popularity of Solana-based memecoins. At its recent height in November, the network saw over 135 million active wallet addresses, according to The Block’s data dashboard.In its follow-up post, VanEck added a disclaimer that the investment firm has positions in Solana, and its price prediction is not a recommendation to purchase or sell the cryptocurrency. VanEck has also applied to the Securities and Exchange Commission to launch a spot exchange-traded fund based on Solana.While the SEC had not previously formally acknowledged any filings for spot Solana ETFs, the agency issued a public notice Thursday soliciting comments on Grayscale's application for a Solana exchange-traded product.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.