Solana (SOL) is showing signs of recovery after VanEck’s prediction that it could hit $520 by 2025.
Investment firm also says Solana’s share in the smart contract platform market could rise from 15% to 22%.
Solana has seen its value drop 2.04% in the past 24 hours and is currently changing hands at $198. Over the last week, the token has dropped 16.1%, but its monthly chart shows a 0.85% gain.
The hourly chart also reflects a $1.76 gain, meaning that the token might be on a slow but steady resurgence path.
VanEck’s Bold $520 Price Prediction
SOL’s recovery coincides with an optimistic prediction from investment firm , which claims that it will hit $520 before the end of the year running. The prediction hinges on two factors — expectations that the M2 money supply will blow up over the next few months and the growing demand for smart contract platforms (SCP).
For clarity, M2 money supply refers to the amount of money that is in circulation in the US economy at a given point in time. This monetary indicator, which includes cash and checking deposits, usually impacts the crypto market in such a way that when it goes up, the prices of Bitcoin and other risk assets, including SOL also go up. That is because an increased money supply tends to lead to inflation, in which case, Bitcoin and its cohorts become more attractive, causing their demand and prices to skyrocket. The reverse is the case when the M2 money supply decreases, as the crypto market usually suffers the same fate.
For now, though, VanEck an over 3% growth for the M2 money supply within this year. That is, from its current state of $21.5 trillion to $22.3 trillion by the year’s end.
About the SCP market, where Solana and other similar platforms operate for easy creation and execution of smart contracts, VanEck has a bigger expectation. According to the investment firm, this market could see a 43% growth within the year to reach $1.1 trillion. Presently, Solana commands 15% of the SCP market, but even that could grow to 22%, VanEck projects.
Potential Catalyst: Grayscale’s Solana ETF Filing
It might be worth noting that there has been a new development that could add to these positive predictions about Solana’s SOL token. On Thursday, the US SEC, which has previously failed to acknowledge several applications for a Solana ETF, admitted receiving a filing by Grayscale for its SOL ETF.
While this does not mean that the commission will approve or deny the application, the acknowledgment, at least, indicates progress for the institutional adoption of SOL.
Although this development has failed to have an immediate impact on price, it sure looks likely to contribute to a stronger long-term outlook for Solana. That is, alongside VanEck’s projections.