Solana’s native token, SOL, hit an All-Time High (ATH) of $88.85 this morning, as the stock market closed for the weekend. SOL has been on an uptrend over the last 4 weeks, appreciating over 210% from $27.82 a month ago, to currently stand at $86.90 as of the time of this writing.
Why the sudden rise?
One reason for Solana’s massive appreciation is that the U.S. securities regulator, the Securities and Exchange Commission (SEC), registered a Solana-centric fund for institutional investors. Earlier in the week, digital asset management firm Osprey Funds registered the first Solana fund with the SEC. In doing so, the firm hinted at giving institutional exposure to Solana markets which experts believe to be good for the growth and adoption of SOL, coupled with adoption in the decentralized finance (DeFi) sector.
Asides from this, a day after the registration with the SEC, real-time data feeder, Pyth Network, announced that it was going live on Solana’s blockchain. The firm provides “high-fidelity streaming data” from trading firms and exchanges, which allows it to cover global market activity without depending on any single data source. According to the announcement, Pyth Network will use Solana’s cross-chain communication protocol “Wormhole” to broadcast market data with decentralized applications functioning atop Ethereum, Binance Smart Chain and Terra blockchains.
Another reason is Solana’s successful venture into non-fungible tokens (NFTs) this month, with the launch of Degenerate Apes. The project saw a collection of the 10,000 pictures of comic apes selling out in just eight minutes. As it happened, the overall trading volume reached almost 96,000 SOL (over $5.9 million at that time).
The demand prospects for Solana’s native token are very high as with any other blockchain. Solana is, however, unique in the sense that SOL serves two primary functions on the Solana network. First, users can stake their SOL holdings directly on the network or by delegating them to an active validator to secure the blockchain. In return, stakeholders receive inflation rewards proportional to their staking balance. The second function is users can use SOL as fees for conducting transactions or running smart contracts. Therefore, more projects get deployed into the Solana ecosystem.
SOL has been on a bullish rise since the start of the year. It started the year trading at $1.84, and traded as high as $58.30, just before the market crash in May, representing a 3,069% rise. After the market crash that saw SOL trade as low as $19.14, the market quickly recovered to trade ATHs a few hours ago. Its current price means that SOL has appreciated over 4,600% Year-to-Date (YtD).