Solana (CCC:SOL-USD) recently threw a huge party for itself in Lisbon, Portugal. The three-day event, which included a massive banner adorned with the words “SOLANA BREAKPOINT,” caps an incredible run for the blockchain platform that supports 50,000 transactions per second.
That speed is a major part of the reason Solana has ascended as quickly as it has. It simply outpaces more well-known names in the sector. The banner at the aforementioned event sends a clear message. Solana wants the world to know that it isn’t slowing down.
In my mind, Solana’s breakpoint is that it has risen so quickly and commands such a strong price that investors may worry it will begin to slow.
It currently trades at around $220. That isn’t cheap in the stock market, let alone the cryptocurrency market. Solana has gone from the $30 – $40 range between May and August to break out late that month.
Since then it has been on fire. Prices rose to near $200 in the span between mid-August and early September. It has established a price floor which looks to be in the range of $170.
Investors likely worry that Solana’s growth will stagnate. Its transactional speed and low cost have put it front and center in the cryptocurrency discussion. But what’s next given that it is now established?
That’s partly what the three-day celebration hoped to discuss.
80,000% Growth Ahead?
It’s fairly clear that Solana leadership recognizes that the firm is at a pivot point. Solana has solidified a place in the cryptocurrency landscape and many believe it has a real chance to dethrone Ethereum (CCC:ETH-USD).
That’s great for the company, but given its $220 price, it must now do more than rely on speed and cost to drive prices higher.
The factor that the company hopes will send prices to higher highs is mass adoption. COO Raj Gokal stated that they “want to see 1 billion people using the network.”
However, according to co-founder Anatoly Yakovenko, Solana currently counts approximately 1.25 million users.
That means it requires roughly 80,000% growth in adoption to reach that vaunted 1 billion user count. It’s nearly impossible to guess at what this would mean in terms of price with any degree of accuracy. But it would certainly mean that massive growth would be required.
However, we can at least compare price growth. From that we can judge whether Solana might realistically reach those growth numbers.
Solana’s price increased by a massive 9,000%-plus in the past year. This can be unheard of numbers in the stock market, but relatively commonplace in the rapidly gaining world of cryptocurrency. And the numbers are impressive, nonetheless.
Solana certainly has growth potential, that much is obvious. But 1 billion users means that 1 in 8 of the world’s 7.9 billion inhabitants will use Solana.
Gokal didn’t specify a date for reaching that goal. Even Bitcoin only currently counts about 76 million users. Ethereum’s user base ranges between just over half a million to 3 million depending on the information source.
I think it’s fair to say that a user base of 1 billion is indeed a lofty goal. And one that won’t be reached by any cryptocurrency with immediacy, or perhaps ever.
What to Do
That said, it’s hard to discount what Solana has done. Crypto venture firms were on heavy display at the three-day Lisbon party. “They moderated panels, joined project cap tables and rented out mansions, palaces and clubs. FTX, Multicoin, Solana Ventures, Jump Capital, Alameda and Race Capital studded the show.”
It’s further evidence that crypto isn’t going anywhere. Solana has carved out a central position in the market, and it isn’t going anywhere either. Perhaps the user growth expectations were a bit overstated. That is somewhat understandable given the excitement at such an event after such quick growth. But it doesn’t invalidate the long-term positive sentiment Solana rightly deserves.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.