Solana Can Rise 40% Thanks to Its Payment App’s Appealingly Low Fees-Cryptocurrency.Mohoagd

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SOL could rise another 40% if Solana Pay takes off and pulls market share from competitors


SOL could rise another 40% if its Solana Pay app takes off in the digital payment arena due to its super-low fees.


I indicated two weeks ago that Solana (SOL-USD) appeared very inexpensive and was likely to climb away from its trough price. In my essay, I stated that extremely negative market sentiment was dragging down SOL and that it was unlikely to endure.


It was trading below $100 at the time, with a price of $94.96 on January 22. However, as of Feb. 9, it was trading at $113.33, up 19.3 percent from the previous day. Investor interest in cryptocurrency is beginning to resurface.


Furthermore, Solana has increased 37 percent since its bottom price of $82.71 on January 24. This obviously shows that SOL is recovering from its bottom price level.


However, it is still significantly lower than both the year-end and three-month highs. For example, on December 31, Solana was trading at $172.10, representing a 34.1 percent year-to-date (YTD) decline. It is down 56.2 percent from its top price of $258.93.


Where This Leaves Solana


Solana is a prominent Ethereum (ETH-USD) rival for smart contracts, decentralized finance (DeFi) apps, and non-fungible assets (NFTs). Its goal is to make it easier to create decentralized apps (dApps).


Solana has recently entered the wallet market. This is built on a partnership between Solana Labs and Web3Auth. They unveiled a digital wallet project aimed at removing technical barriers that prevent users from setting up wallets and moving into the DeFi industry.


As a result, with a market valuation of $36 billion, Solana is now the eighth-largest cryptocurrency. This puts it neck and neck with Cardano's (ADA-USD) market valuation of $40 billion.


It is also a long way from its $55 billion market valuation at the end of 2021. As a result, there is still plenty of room for SOL to rise in the near term.


Analysts are now very bullish about Solana. Morgan Creek Capital Management believes it is one of the only coins capable of surviving a crypto winter.


The Solana Pay Launch


One of the reasons Solana is anticipated to last is its constant expansion into new territory. For example, Solana Labs, the parent company, announced the launch of Solana Pay last week. According to CryptoPotato, this is the company's first foray into the congested digital payments industry.


Solana Labs' announcement on February 1st includes an illustration of how its new Solana Pay dApp would herald in a new era of payments and commerce. The example assumes that "digital currencies are ubiquitous and digital money passes via the internet like data - unfiltered and without intermediaries charging every transaction."


Furthermore, the capacity of this product to significantly reduce prices for both consumers and merchants is one of the reasons why it has the potential to catch on. Solana Labs has the following to say regarding their prices:


"The protocol provides a specification that enables the consumer to send digital dollar currencies, such as USDC, straight from their wallet into the merchant's account, settling instantly with expenses estimated in fractions of a penny."


If the analogy of "fractions of a penny" is true, it must be more explicit. For example, Block (NYSE:SQCash )'s App costs merchants 2.75 percent to execute a transaction. That works out to 2.75 cents on the dollar.


So, if the Solana Pay app becomes popular and its cost is, say, 0.50 percent, retailers (and ultimately consumers) might save 82 percent of their current prices. This can be seen by applying the following formula: (0.005/0.0275) = 1-0.1818=0.818, or 81.8 percent.


What to Do With SOL Crypto


If Solana Pay takes off, SOL will likely rise significantly. Block, for example, has a market capitalization of about $65 billion. This is only 80% of Solana's $36 billion market valuation. Even if it only receives half of that 80% increase, its market value may increase by 40% to $50 billion.


Solana would be worth $158.70 for each of its tokens in such event. For most people, a 40% gain in a cryptocurrency is a very attractive future return on investment.


Solana Is a Cheap Crypto Buy Today As It Hits New Lows


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SOL Crypto may be decreasing as a result of investors' selloff of hazardous assets.


Solana  has had a difficult time recently. This is especially true in the last week, when SOL crypto has plummeted drastically. For example, on December 27, Solana was trading at a recent high of $202.53. The cryptocurrency then dropped out of bed, and as of Jan. 22, it was trading at $94.96.


This is a unique chance for ardent cryptocurrency investors. For starters, they must be able to withstand the onslaught of advisors and skeptics who predict that the bottom has yet to be reached.


Furthermore, as Barron's pointed out, Russia's apparent ban on all cryptocurrency on January 21 left the market in "turmoil." As a result, the price of Bitcoin  plummeted below the psychologically significant $40,000 mark. The Wall Street Journal refers to many who see this price level as a "line in the sand" for cryptocurrency bulls.


Furthermore, Ethereum went below a red threshold of $3,000 per ETH cryptocurrency. According to Barron's, both of these events "unnerved" many cryptos, including Solana.


Solana and Crypto Market Crashes


Solana has a market capitalization of $29.9 billion as of January 22. SOL cryptocurrency had not traded this low since the end of August 28, when it was trading at $94.47. Meanwhile, it had risen to $258.93 by November 5. However, the cryptocurrency has already fallen below $100.


This represents a 63.5 percent decrease from its most recent top. It signifies a loss of more than $52 billion in value for Solana. Keep in mind, though, that this is nothing compared to what has occurred to Bitcoin. According to Bloomberg, Bitcoin's market value has now dropped by more than $600 billion as a result of its 50% drop.


Of course, Solana might drop below $90, which would be a significant red flag for Solana. But, for the time being, I don't see that occurring.


For one thing, there is normally a relatively speedy return after big dips in financial assets and securities like these. According to my experience, it normally takes months for a large break in financial assets to begin to make a significant comeback.


Furthermore, according to A Wealth of Common Sense, half of all market breaches achieve breakeven in less than a year. The website keeps track of all stock market collapses and indicates how long they lasted. Granted, stock market crashes are not always the same as crypto market crashes, but the same principles apply.


What Could Be Causing the Crash


Not everyone believes Solana's deterioration has ended. Coin Telegraph, for example, just released a post claiming that SOL crypto might plummet to $70 per token. Granted, this is based on bearish chart pattern analysis, which is a technical, rather than a fundamental, examination of the cryptocurrency.


The report attributes Solana's collapse to the Federal Reserve System of the United States' decision to "unwind its $120 billion a month asset purchasing program, followed by three or more interest rate hikes spread throughout 2022."


The post accused the Fed's "loose monetary policies" for "help[ing]" to boost cryptocurrency valuations, especially Bitcoin (and others like Solana). The article also mentioned a "head and shoulders" shape in the SOL cryptocurrency price.


According to a recent Forbes story, investors are scurrying to "dump off risk assets" as "central banks turn off money taps simultaneously."


What to Do With SOL Crypto


Whether SOL crypto falls below $70 or not, it is unlikely to stay there for long. In fact, now is probably an excellent moment to start stockpiling SOL crypto.


One rationale for this is to average down your initial cryptocurrency cost. Furthermore, for those who do not currently hold SOL crypto, it appears to be a rather inexpensive starting point. This will be the case even if the price continues to fall, as it will present another opportunity to purchase the cryptocurrency at a low cost.


The main line is that SOL crypto is becoming more affordable and may be nearing the bottom, indicating that it is approaching a low price.


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