Investment firm VanEck has made headlines with its bold prediction that the price of Solana’s native cryptocurrency, SOL, will soar to $520 by the end of 2025. This forecast comes at a time when the demand for smart contract platforms (SCP) is on the rise, coupled with an anticipated increase in the M2 money supply in the United States.
The M2 money supply is a key indicator of the amount of money circulating within the U.S. economy, influencing various markets, including cryptocurrencies. It encompasses cash, checking deposits, and other near-money assets, such as savings deposits. VanEck estimates that the M2 money supply will grow from the current $21.5 trillion to approximately $22.3 trillion by 2025. A growing M2 supply typically results from central banks adopting strategies such as lowering interest rates or engaging in quantitative easing, which ultimately enhances liquidity within the economy and encourages investments in higher-risk assets like cryptocurrencies.
VanEck also highlights the significant potential for growth in the smart contract platform market, projecting it to increase by 43% to reach a valuation of $1.1 trillion by the close of 2025. Currently, Solana commands around 15% of this burgeoning market, but the firm anticipates that this share will expand to 22% by year-end 2025.
In their analysis, VanEck remarked, “We forecast its share to rise to 22% by EOY 2025. This projection is supported by Solana’s developer dominance, increasing market share in DEX volumes, revenues, and active users.”
Employing an autoregressive (AR) forecast model, which leverages historical data to predict future trends, VanEck estimates that Solana’s market capitalization could reach approximately $250 billion. This estimation translates into a projected SOL price of $520, based on a floating supply of around 486 million tokens.
Further bolstering these predictions is the increasing interest from U.S. firms in Solana-based investments, as evidenced by VanEck’s recent filing for a Solana ETF in 2024. This move comes after previous challenges with the U.S. Securities and Exchange Commission (SEC) regarding ETF applications linked to SOL. Notably, the SEC’s recent shift in tone—acknowledging a filing by Grayscale for a Solana ETF—suggests a more favorable regulatory environment. The commission now has until October to either approve or deny this application, a decision that could have significant implications for Solana and the broader cryptocurrency market.
As the landscape continues to evolve, investors and stakeholders will be keenly watching how these developments unfold and whether VanEck’s optimistic predictions for Solana come to fruition.
