Solana or Bitcoin: Which Is Better in 2022?

Bitcoin’s weak start to 2022 augurs well for other cryptos, like Solana, which appears to be the better digital asset right now.

| More on:
Diagonal chain made of zeros and ones. Cryptocurrency and mining.

Image source: Getty Images

Bitcoin (CRYPTO:BTC) hasn’t closed above US$50,000 in 2022. When the world’s most popular cryptocurrency soared to as high as US$67,566 on November 8, 2021, crypto bulls were quick to claim that BTC is the new gold. However, the euphoria was short-lived, because the price went on a tailspin.

A flash crash in December 2021 sent the crypto tumbling. As of January 19, 2022, BTC investors are losing by 9.85% year to date. Ethereum outperformed BTC last year, although it’s doing worse thus far this year (-15.93%). However, besides the top two cryptocurrencies, Solana (CRYPTO:SOL) could be the better digital asset for growth investors to buy right now.

Bitcoin and gold

Goldman Sachs is one of the institutions that is bullish on Bitcoin. Based on the American investment bank’s latest research report, the top crypto has the potential to cross the US$100,000 mark in the coming years. The report added that BTC could probably be the new gold.

After a two-year hiatus from cryptocurrencies, Goldman reopened its crypto desk last year and has been monitoring blockchain since. The bank also believes people can use crypto as a hedge against inflation. Meanwhile, gold prices hit US$1,843.20 per ounce on January 19, 2022, the highest level in two months.

According to market observers, investment interest in the world’s most precious metal is returning due to inflation worries. Barrick Gold’s CEO Mark Bristow said cryptos can’t beat gold as an inflation hedge. Michael Armbruster, managing partner at Altavest, said, “We could not be more bullish on gold over the next six months or so, as the U.S. economy begins to decelerate.”

Armbruster is bullish, because Treasury yields are trending higher. He added that it will turbo-charge gold prices to US$2,000 or more if the yields peak soon. Goldman’s bold prediction seems to have no basis, given the current turbulent times in the cryptocurrency market.

Reports say that after record highs in 2021, the price of Bitcoin and other cryptocurrencies are more unpredictable than ever. However, despite the lack of regulation and volatility, new cryptocurrencies and uses are developing all the time.

New crypto solutions

If you’re unfamiliar with Solana, it’s now the fourth-biggest cryptocurrency after BTC, ETH, and Binance Coin. It’s a cryptocurrency and a flexible platform for running crypto apps. SOL first traded on April 10, 2020, at US$0.95.

As of January 19, 2022, the price is US$135.79, or 14,193.68% higher from 21 months ago. SOL has gone up to high as US$259 last year, but it has sputtered like BTC. Still, crypto enthusiasts believe Solana’s technology is cheaper than Ethereum and radically faster.

According to an analyst report from JPMorgan, Ethereum is slowly losing its grip in non-fungible tokens (NFTs). Since August 2021, most of the NFT volume share uses the Solana blockchain. Crowd Wisdom predicts that Solana could climb 115% by year-end 2022, while Wallet Investors see a return potential of 208.89% in 12 months. Coin Price Forecast is likewise bullish, predicting the coin to close 2023 at US$500.

Tough market conditions ahead

Crypto investors can expect tougher market conditions this year. Bitcoin faces rough sailing, although Solana could deliver higher returns, because the coin is starting to dominate the fast-growing NFT space. Still, make sure you’re investing money you can afford to lose.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Ethereum.

More on Investing

Canadian Dollars
Stock Market

Where to Invest $5,000 in April 2024

Do you have some extra cash to spare? Here are five companies to invest $5,000 in next month.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Up 53% From its 52-Week Low, Is Cargojet Stock Still a Buy?

Cargojet (TSX:CJT) stock is up a whopping 53%, nearing closer to 52-week highs from 52-week lows, so what's next for…

Read more »

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »