When it comes to cryptocurrency investing, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) typically get all the headlines. And for good reason. Both are up about 30% for the year, and both should be core components of any well-diversified crypto portfolio.
But if you only have $500 to spend on crypto right now, there might be a better option: Solana (CRYPTO: SOL). The sixth-biggest cryptocurrency in the world is up about 40% during the past 90 days, and is suddenly gaining a lot of attention due to the likely introduction of spot crypto exchange-traded funds (ETFs). Here’s why you should consider Solana to be the next crypto in your portfolio.
Is Solana the heir apparent to Ethereum?
Soon after it launched back in March 2020, Solana immediately made headlines as a potential Ethereum killer. Just like Ethereum, Solana is a smart contract blockchain network with a very diversified blockchain ecosystem.
But there’s one key difference: Solana is blazingly fast, and much cheaper to use. The total throughput capacity on Solana is now more than 100,000 transactions per second. By way of comparison, the core Ethereum blockchain struggles to process 30 transactions per second.
What’s really exciting is that all of that amazing throughput capacity is now being put to work, generating a surprising amount of revenue for Solana blockchain ecosystem partners.
According to investment firm 21Shares, Solana generated more than $2.85 billion in revenue during the past 12 months. This revenue came from a variety of activities, including decentralized finance (DeFi), cryptocurrency trading, meme coins, decentralized physical infrastructure (DePIN), and artificial intelligence (AI). That’s on par with the 12-month revenue figures of companies such as Palantir Technologies (NASDAQ: PLTR) and Robinhood Markets (NASDAQ: HOOD).
The rise of Solana treasury companies
At one time, digital asset treasury companies were limited exclusively to Bitcoin. These companies raise money from outside investors, and then immediately use that money to invest in one specific cryptocurrency. The pioneer here is Strategy (NASDAQ: MSTR), which has now accumulated $78 billion worth of Bitcoin.
But of late, new publicly traded Solana treasury companies have launched as well. All told, there are 18 different companies that hold more $4 billion in Solana. That’s roughly equivalent to 3% of Solana’s total circulating supply.
