Solana will miss the next growth wave

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The positive momentum from the ETF launch is gaining traction, and capital growth rates are once again on the rise. On February 8, the net inflow amounted to $405 million, ranking third in the statistics for the past month. The negative impact of Grayscale has significantly diminished from $640 million on January 22 to the current $102 million.

The combined volume of nine newly created funds (Grayscale was converted from a trust) reached $10 billion in just one month. Skeptics had forecasted that this would take at least a year. The significant demand almost doubled the outflow from Grayscale, which is unrelated to interest in Bitcoin. This led to Bitcoin’s rise aiming to break the $50,000 level and strengthen its share in the cryptocurrency market.

The irreversible emergence of ETFs occurred in October of last year when the deadline for the SEC’s appeal in the Grayscale fund conversion case expired. One of the few altcoins that managed to capitalize on the changing sentiments in the cryptocurrency market was Solana. The coin’s growth was fueled by its own factors, such as the joint pilot project with VISA for interbank payments and the inclusion of blockchain operations in the Shopify payment gateway.

Interest in Solana is driven by its high transaction speed and low fees, prompting the investment firm VanEck to estimate the coin’s growth to $3211 by 2030 under a favorable scenario.

The buzz around Solana was also fueled by the absence of critical errors since February 2023, which pleasantly surprised many observers, as the network had experienced failures on average once a quarter in previous periods. However, maintaining a flawless record for exactly one year unfortunately did not happen: on February 6, a critical error occurred, leading to a 5-hour halt and network rollback.

While defending the product, proponents and leadership always refer to its beta status, although Solana’s history dates back to March 2020. Daniel Kun from Consensus magazine considers this a manifestation of hypocrisy since the test nature of the network is not mentioned anywhere when selling related products (such as Saga smartphones).

Failures deal a serious blow to the reputation, potentially leaving pilot projects, like the network itself, permanently in beta. According to analysts at S1 Production Studio, Solana will not be able to grow at the same pace in the near future and will ultimately lag behind Bitcoin in growth rates in the first quarter.


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