The logo of cryptocurrency platform Solana.
Jakub Porzycki | NurPhoto via | Getty Images
The price of the Solana token jumped Wednesday amid an ongoing rally in altcoins and bullish remarks on the token from famed tech investor Cathie Wood.
Solana was last higher by nearly 12% at $62.38. Earlier in the day it climbed as much as 16%. It has nearly tripled in price in the past month.
The spike comes a day after Ark Invest CEO Cathie Wood applauded its performance this year on CNBC.
“Solana is doing a really good job,” she told CNBC’s “Squawk Box” on Tuesday. “Ether was faster and cheaper than bitcoin [back] in the day – that’s how we got ether. Solana is even faster and [more] cost-effective than ether.”
Wood went on to say on CNBC Pro Talks that she “really does like Solana” while also noting that its downtime – the time the network is down, under maintenance, or suffering an outage – “is much higher than it is for Ethereum.”
“People are willing to put up with that because maybe the transaction sizes are not as large or for some reason are not as important, they just want speed and cost as their top priority,” Wood told CNBC PRO. “Each one of [the networks] is going to have a place.”
Solana, the sixth largest crypto token by market cap, according to CoinGecko, became the darling of the crypto world in the 2021 bull market as it sold investors a vision of something like Ethereum, but without the slow and expensive transactions.
Activity on Solana has been growing all year, particularly in liquid staking protocols like Jito, according to data provider Kaiko. The token has topped the list of the most traded altcoins on US-available exchanges this year, outpacing dogecoin, litecoin, Polygon’s MATIC and Ripple’s XRP.
More recently, the token is following a broader crypto market rally led by bitcoin, that began Oct. 24, when the coin doubled for the year and topped $35,000 for first time since May 2022. Shortly, after ether followed, rising to the key psychological level of $2,000. Historically, the altcoin rally tends to follow ether.
“After Oct. 24 bitcoin started losing its momentum, which during bitcoin bull markets causes traders to go down the risk curve and switch to alts as a way of chasing huge profits,” said Mikołaj Zakrzowski, an analyst at data provider CryptoQuant.
This time a year ago, the coin was facing a crucible moment after the FTX blowup sent it down 70% over two days and briefly traded under $10. FTX and its now-fallen leader Sam Bankman-Fried were widely credited with providing substantial money and resources behind the Solana project to get it off the ground.
Solana is up about 510% this year and has been one of the best performing cryptocurrencies of 2023. By comparison, bitcoin and ether have gained about 120% and 68%, respectively.