Investment firm VanEck has forecasted a bullish outlook for Solana (SOL), predicting the cryptocurrency will reach $520 by the end of 2025. The firm attributes this surge to two key factors: the rising demand for smart contract platforms (SCPs) and an expected increase in M2 money supply.
M2 Money Supply and Its Impact on Crypto
M2 money supply, which includes cash, checking deposits, and easily convertible assets like savings deposits and money market funds, is a crucial metric for economic liquidity. VanEck projects that M2 will grow from the current $21.5 trillion to $22.3 trillion by 2025. Historically, an expanding M2 supply has led to greater liquidity in financial markets, encouraging investments in risk assets like cryptocurrencies.
When central banks lower interest rates or implement quantitative easing, more money enters circulation, often benefiting digital assets. This macroeconomic backdrop is expected to provide a favorable environment for Solana’s growth.
Smart Contract Platform Market on the Rise
Solana operates within the SCP market, which enables the development and execution of decentralized applications (dApps). VanEck anticipates this market will expand by 43%, reaching a valuation of $1.1 trillion by 2025. Currently, Solana commands approximately 15% of the SCP market, but VanEck forecasts its dominance to increase to 22% within the next two years.
VanEck highlights Solana’s strong developer ecosystem, increasing decentralized exchange (DEX) volumes, rising revenues, and a growing active user base as key drivers of its expected market share expansion.
Price Forecast and Market Cap Projections
Utilizing an autoregressive (AR) forecasting model, VanEck estimates Solana’s market capitalization will hit $250 billion by 2025. With approximately 486 million floating SOL tokens, this translates to a projected price of $520 per token.
VanEck is among several U.S. firms that filed for a Solana ETF in 2024. While the U.S. Securities and Exchange Commission (SEC) initially rejected multiple SOL ETF applications, it recently acknowledged Grayscale’s filing, signaling a potential shift in regulatory sentiment. The SEC now has until October to approve or deny the application, which could be a significant catalyst for SOL’s price movement.
Also Read: Solana ETF Approval Gains Momentum as SEC Acknowledges Grayscale Filing
As institutional interest in Solana grows alongside favorable macroeconomic conditions, VanEck’s bullish prediction suggests SOL could be a major player in the next crypto bull cycle.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
