Asset management firm VanEck has predicted that Solana (SOL) is on track to hit a $520 price target by the end of this year. The asset manager said its projection for Solana’s price hinges on its potential year-end market share within the Smart Contract Platform (SCP) world. It estimated the projected price based on the M2 Money Supply.
The VanEck Bull Case for Solana
Matthew Sigel, Head of Digital Assets Research, and Patrick Bush, Crypto Research Analyst, said on X that the M2 Money supply is poised to impact the Solana price growth. The researchers projected their forecast is based on the growth of M2 money supply and its strong correlation with crypto market capitalization.
The VanEck executives projected that the M2 will be $22.3 trillion by the end of 2025. This target is based on its annualized growth rate of 3.2% since it hit a trough in October 2023. Using regression analysis, the VanEck researchers estimated that the SCP market cap will grow by 43% to $1.1 trillion by the end of 2025.
Solana holds 15% of the smart contract platform valuation, a value VanEck said will jump to 22% by year-end.
“This projection is supported by Solana’s developer dominance, increasing market share in DEX volumes, revenues, and active users. Using an autoregressive (AR) forecast model, we estimate Solana’s market cap will reach ~$250B, implying a SOL price of $520 based on ~486M floating tokens,” the researchers wrote.
Solana Growth Catalysts
Expanding on the VanEck projection, Solana is a protocol with a functional and growing ecosystem. Known for its memecoin revolution, platforms like Pump Fun have helped refocus it on growth.
Today, Solana boasts of top memecoins like TRUMP and MELANIA that hit high valuations in days, attracting new mainstream users. Amid the adoption, the ecosystem recorded an $840 million ecosystem app revenue, which jumped by 213% in Q4 2024.
According to Messari’s report, this growth refers to the memecoin revolution. In addition, the Decentralized Finance (DeFi) on Solana is very robust. Data from DeFiLlama pegs the DeFi Total Value Locked (TVL) at $19,54 billion.
The combination of the SOL adoption sources has placed the coin in the spotlight for more price rallies.
SOL ETF and Current Price Outlook
Considering the pro-crypto administration in the US, there is also a high chance that a SOL ETF will gain approval this year.
Notably, VanEck is in the race to get approval for these products as well. Cboe BZX just refiled the 19b-4 application for the firm’s Solana ETF and those of Canary Capital, Bitwise, and 21Shares. This product, if approved may draw in more institutional funds into the Solana ecosystem.
At the time of writing, Solana’s price is facing a drawdown, triggered by the drop in BTC market valuation below the $98,000 mark. SOL is changing hands at $190.04, down by 4.6% in the past 24 hours. The coin traded from a low of $189.30 to a high of $203.88 before settling at its current level.
For the VanEck prediction to pass, SOL has to grow by at least 170% from its current price, a feat proponents believe is feasible.
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