Will 2022 Be the Year of Solana?

Solana is a top-five cryptocurrency and has rallied by more than 10,000% this year, but can it keep up this performance in 2022?

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Over the last few weeks, the rally in cryptocurrency prices has fizzled out, as the industry faces several short-term headwinds. However, investors in the space, especially ones who are long high-potential projects like Solana (CRYPTO:SOL), know that this presents one of the best opportunities to gain or increase your exposure.

As we’ve seen a few times now since the significant cryptocurrency revolution started last year, the industry can have periods of rangebound trading, but, ultimately, it continues to rally over the long run.

It can be easy to make the mistake and think that as prices are rallying and the total value of the cryptocurrency market is gaining rapidly, that the industry is expanding. And when prices are flat and the total market cap isn’t growing, it’s easy to think that the growth of the industry has slowed down.

In reality, though, developers are consistently building new blockchain projects and bringing new ideas to life, so as long as you find assets that you can have confidence in over the long run, like Solana, now is an excellent time to gain exposure and position yourself for this long-term growth.

But is Solana the top cryptocurrency to own in this environment?

Is Solana the top cryptocurrency to buy now?

Solana offers investors a tonne of opportunities. It didn’t become the fifth most valuable cryptocurrency by accident.

Already this year, the price of SOL has grown from around $2 per coin to more than $200 a coin, where the cryptocurrency is today. And as the Solana blockchain continues to become more popular, you can expect that the demand and consequently the price for SOL will continue to increase.

But why would investors want to buy SOL? The major reason why Solana is such a top investment is that it’s a blockchain platform that can run smart contracts. So, as developers continue to create new projects and dApps on the Solana blockchain, more users will naturally be drawn to the network.

In fact, there are already more than 400 projects on Solana’s blockchain, and more than 45 billion transactions have already been processed, as it has the capability to handle 65,000 transactions per second.

And much like other blockchains, in order to use Solana, you need its native currency, SOL. So, naturally, as Solana gains in popularity, and more users are drawn to its high-quality blockchain, the demand for SOL will continue to increase.

When will SOL rally again?

There’s no telling when Solana and the rest of the cryptocurrency industry might regain momentum. However, with that being said, the headwinds the industry faces at the moment, while still serious, shouldn’t have too much impact over the long run.

One of the biggest headwinds currently is the upcoming federal reserve meeting today. As interest rates rise, which they are expected to do starting in 2022, riskier assets tend to become less appealing for investors.

So, at the moment, cryptocurrencies are facing selling pressure, as investors unload higher-risk assets. With a blockchain like Solana, which offers so much long-term potential, though, higher interest rates should have minimal impact on its long-term performance. In fact, this slight pullback has given investors the chance to buy these high-quality cryptocurrencies while they trade cheap.

One thing is for certain, though. This high-potential industry won’t trade flat forever. So, while you don’t want to invest impulsively, now is the time to be researching and finding investments that you can get behind and commit to.

2022 could be the biggest year yet from top cryptocurrencies like Solana, especially as more major companies such as Nike continue to join the space.

So, while prices are cheap, finding high-quality cryptocurrencies like Solana or top crypto stocks to invest in could set you up perfectly for 2022 and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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