On October 27, analysts from the investment firm VanEck published a forecast for Solana’s price by 2030. Many media outlets spread it with loud headlines, mentioning that SOL will grow by 10,000%. Let's break down what VanEck exactly suggests, what it doesn’t mention and what’s wrong with such statements.
VanEck is a large American investment company. It is actively expanding its presence in the crypto market. Their Ethereum futures ETF is already trading; they have recently applied for a spot Ethereum ETF. Besides, VanEck is also waiting for a decision on a spot Bitcoin ETF.
If you are not familiar with what an ETF is, read our review: What is a spot bitcoin ETF, and why does everyone talk about it?
Highlights from VanEck's Solana forecast
VanEck's forecast compares Solana to other blockchains in technical matters. For example, it provides the chart below comparing the throughput in megabytes per second (MB/s, not to be confused with TPS, the number of transactions per second) of different blockchains.
According to it, Ethereum, before switching to Proof-of-Stake, had the lowest throughput of 0.08 MB/s, while Solana's current version is 125 MB/s and will be 1250 MB/s after the Firedancer update.
However, what attracts the most attention is this picture with three predictions for the price of SOL by 2030:
⚖️ Given the basic case, the price will be $335.
🐻 Given the bear case, the price will be $10.
🐂 Given the bull case, the price will be $3,211.
SOL’s value at the moment of VanEck's forecast stood at about $32. That is, VanEck allows for a scenario where the SOL price will be 100 times higher in 2030. Because of this, you could see such huge percentages in the headlines of various news reports.
The details and rationale behind each of the scenarios can be found in VanEck's publication.
What's the deal with predictions of SOL to rise 100 times
These forecasts always rely on data from the past and add assumptions and expectations for the future. In reality, things can go differently. The crypto market is very young and dynamic. Even the top projects can leaf the leading positions or even disappear with a new market cycle.
Take a look at the screenshot below. This is CoinMarketCap’s historical snapshot of the top 15 coins by market capitalisation from seven years ago. How many projects do you remember? How many of them are relevant now? By 2030, the crypto landscape could be substantially refreshed again.
In the case of VanEck, the company is making a huge assumption about the mass adoption of cryptocurrencies by the end of this decade. For comparison, the current capitalisation of the entire crypto market is roughly $1.27 trillion, over the half of which is accounted for by BTC — $676 billion. According to VanEck, in the bull case, SOL’s capitalisation would be almost $2.2 trillion (projected price of $3,211*projected supply of 679 million coins). That is almost double the current capitalisation of the whole crypto market.
On the one hand, this feels real. There will probably be dollar inflation, and cryptocurrencies, along with blockchain, may indeed become mainstream, with Solana possibly taking the lead. However, actually, it is hard to imagine. Anyway, Solana will hit one of these prices ($10, $335, $3211) by 2030.
On the other hand, VanEck mentions that these are just possible scenarios based on assumptions. The company encourages readers to do their “own research” and their “own conclusions”. It also honestly informs that their “team owns SOL tokens”, and that this report is “not intended as financial advice or any call to action”.
Notably, VanEck references FTX and Alameda briefly, and in the context of their early investments in Solana. Absent from the discussion is the fact that in September FTX was authorised to sell its crypto holdings. These developments could potentially exert sustained pressure on Solana’s asset price.
Be cautious when seeing any forecasts, DYOR, and do not give into FOMO.
👀 Here are some news on Solana and our careful predictions:
Visa adds USDC payments on Solana
MakerDao uses Solana codebase for NewChain
Bitcoin price prediction for the end of 2023
