Bitcoin and cryptocurrency prices appear to have plummeted — ending the worst weekly trajectory for cryptocurrencies since last December, as the major cryptocurrencies lost $300 billion in total value.
This week, the world’s No. 1 Bitcoin is up 3.3%. The price of Ethereum, its closest competitor by market capitalization, jumped 5.3%. Other major cryptocurrencies are also on the hook. BNB is up 9.5%, Cardano is up 16.2%, and Solana is up 10.6%.
While the entire crypto market is experiencing an explosion, Bank of America
“Its ability to provide high throughput, low cost, and ease of use creates a blockchain optimized for consumer use cases such as micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming,” Shah noted.
The analyst notes that there are more than 400 successful decentralized projects on Solana’s blockchain.
Besides, solana boasts some of the fastest transaction speeds. “These innovations allow approximately 65,000 industry-leading transactions to be processed per second at an average transaction fee of $0.00025 while remaining decentralized and relatively secure,” Shah explained in the note.
But the wide range of applications and industry-leading transaction speeds have their trade-offs.
“Solana prioritizes scalability, but a less decentralized and relatively secure blockchain has its trade-offs, as evidenced by several network performance issues from the start… Ethereum prioritizes decentralization and security, but at the expense of scalability, which has resulted in network congestion and transaction fees. which is sometimes greater than the value of the transaction being sent,” the analyst wrote, according to Coindesk.
Solana was launched in March 2020 as a decentralized blockchain that can host highly scalable applications. Today, it is the fifth largest cryptocurrency – with more than $50 billion settled in transactions and more than 5.7 million NFTs being minted, according to Alaksh Shah.
Solana is often compared to Ethereum because both cryptocurrencies support smart contracts, which are the main building blocks for decentralized applications, such as blockchain-based banks, and NFTs (non-fungible tokens).
Over the past year, the cryptocurrency has attracted a lot of interest from investors and has surged by 4000%. However, its size pales in comparison to its closest competitor, ethereum. Solana has a market capitalization of $47 billion, which is just over a tenth of the size of Ethereum.
The Bank of America analyst believes this valuation gap bodes well for Solana. This means that its huge potential has not yet been fully absorbed in the price. It also gives the cryptocurrency a lot of room to grow as the market share of Ethereum and other major cryptocurrencies dwindles.
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