On January February 6, VanEck, the prominent asset manager, shared a bullish outlook for the fifth largest cryptocurrency, Solana (SOL) in the latest post on X (formerly known as Twitter).
According to VanEck, Solana is expected to witness a major surge and expected to achieve the target of $520 by the end of 2025. The prediction is based on Solana’s anticipated market share within the smart contract (SCP) sector, which is closely linked to the growth of the U.S. M2 money supply.
Our Solana Price Target by the End of 2025 is $520
We value Solana (SOL) based on its projected year-end market share within the smart contract platform (SCP) market. Our SCP market cap forecast is derived from U.S. M2 money supply growth, given its strong historical correlation…
— VanEck (@vaneck_us) February 6, 2025
The asset manager estimates that M2 will reach $22.3 trillion by late 2025 with a 3.2% annual growth rate since its October 2023 low. Following this trajectory, the total SCP market capitalization is expected to rise 43% to approximately $1.1 trillion by surpassing its 2021 peak of $989 billion.
“Historical data shows a strong correlation between M2 and SCP market cap, with a 12-month moving average R² of 0.36 and a t-statistic of 5.7 (p < 0.0001),” the post reads.
VanEck Highlights Growth in Solana’s On-Chain Activity
Currently, SOL holds 15% of the SCP market capitalization, however, the analyst believes that this will increase to 22% by the end of 2025. The surge will mainly fueled by Solana’s developer dominance, increasing market share in DEX volumes, revenues, and active users.
In the speculation, the VanEck team writes. “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.”
Solana blockchain is gradually heading towards completing its dream to become an ‘Ethereum killer’. In the last year Q4, the ecosystem experienced significant success with a 213% revenue boost to $840M, largely fueled by memecoin trades and a 150% increase in decentralized exchange (DEX) volume.
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