Investment firm VanEck has released a bullish forecast for Solana (SOL), predicting that the cryptocurrency could reach a price of $520 by the end of 2025. This projection is based on an anticipated expansion in the smart contract platform (SCP) sector and Solana's increasing market share within this space.
VanEck's analysis ties the growth of the SCP market to the U.S. M2 money supply, which includes cash, checking deposits, and easily convertible near money. The firm projects that the M2 money supply will grow to $22.3 trillion by the end of 2025, maintaining an annualized growth rate of 3.2% since October 2023. This monetary expansion is expected to correlate with a 43% increase in the SCP market capitalization, reaching $1.1 trillion by year-end.
Currently, Solana holds approximately 15% of the SCP market share. VanEck anticipates this share will rise to 22% by the end of 2025, driven by Solana's strong developer activity, increasing decentralized exchange (DEX) volumes, rising revenues, and a growing number of active users. Using an autoregressive forecast model, VanEck estimates that Solana's market capitalization could reach around $250 billion, which, based on a circulating supply of approximately 486 million tokens, implies a price of $520 per SOL.
This optimistic outlook is further supported by Solana's recent performance. The network has seen significant growth in its decentralized application (dApp) ecosystem, with dApp revenue surging from $4 million in 2022 to $1.25 billion in 2024. Additionally, Solana has become a primary destination for developers, adding 7,625 new developers in 2024, compared to Ethereum's 6,456 during the same period.
While VanEck's projection is notably bullish, it aligns with a broader trend of increasing institutional confidence in Solana's long-term potential. Factors such as scalable infrastructure, low transaction fees, and a growing ecosystem of decentralized applications contribute to this positive sentiment.
As the cryptocurrency market continues to evolve, investors and stakeholders will be closely monitoring Solana's development and market performance to assess the accuracy of these projections.
Author
Surabh Yadav
