Market Cap & Upside (Day 502)

When I first started learning Solana, its price was less than $4. Today, it has shot up to $110+ with a market cap of $34 billion! So does it still have an upside?

I have experience developing on Ethereum and Solana and knowledge in some of the most popular chains. But, at the end of the day, my personal bias goes to only Ether and Sol.

Bitcoin has a market cap of $940 billion. If you look at the top market cap companies in the US, here's your top 10 as of today:

  1. Apple ($2.521 T)
  2. Microsoft ($2.268 T)
  3. Alphabet (Google) ($1.939 T)
  4. Amazon ($1.761 T)
  5. Facebook ($1.077 T)
  6. Tesla ($735.38 B)
  7. Berkshire Hathaway ($646.93 B)
  8. NVIDIA ($559.22 B)
  9. Visa ($504.97 B)
  10. JPMorgan Chase ($477.26 B)

And compare that with the cryptocurrencies (data from CoinGecko):

  1. Bitcoin ($941 B)
  2. Ethereum ($440 B)
  3. Cardano ($97 B)
  4. Binance Coin ($76 B)
  5. Tether ($66 B)
  6. Ripple ($58 B)
  7. Dogecoin ($39 B)
  8. Solana ($34 B)
  9. Polkadot ($33 B)
  10. USD Coin ($24 B)

Bitcoin is a pure store of value, with no "income statement" or "revenues" whatsoever. But Bitcoin's market cap ranks #6 if it's on the US Stocks chart, higher than Tesla and NVIDIA!

Ethereum, on the other hand, is a programmable blockchain, where you can find real products, such as lending platforms and exchanges, which actually generate revenues for different companies or (decentralized) organizations. But its market cap is only half of that of Bitcoin and is very close to JPMorgan Chase, arguably in the same "fintech" sector.

For what it's worth, I should also point out that there are coins like Dogecoin, with a market cap of over $40 billion with nothing but hype--prices aren't always rational. But I'm going to do a rational analysis anyways based on the market cap. Purely personal opinion, not investment advice!

Using Ethereum as a benchmark, what's Solana's upside gonna be like? Personally, I think Solana will grow and become the next biggest programmable blockchain platform next to Ethereum, if not bigger. I think over the years, Solana's market cap could rival Ethereum at some point. With that said, with a current market cap of $34 billion, there is a potential 10x upside for Solana still. And assume Ethereum's market cap may continue to grow, the upside could go even higher.

Witnessing Solana's price hiked from less than $4 to over $110, it has grown over 30x already. So the "SOL train" may have gone pretty far already. 10x is still an excellent upside, but it may take years to get there.

Another factor--the values generated on Solana--from the NFTs minted to the decentralized exchange fees and DeFi fees generated, could make Solana more valuable.

I propose to track revenues (fees) generated from all applications on a blockchain platform to have some apple-to-apple comparisons. For example, in chains like Bitcoin, if its sole purpose is to facilitate payments, maybe we need to track its aggregated transaction volume. We may also track the gas costs from different public blockchains as benchmarks. We can categorize these blockchains by the purpose of the chains, then have a standard set of data where we can compare the economic value of each chain, so the investors can have some data for making better decisions.

  1. 2

    Wow it shot up since this article posted. After buying a cheap nft on opensea and paying 4x the price in gas, I can understand why Solana is a good alternative based on that alone.

    I'm just now diving into the developer dapp space, are there any other factors why you would develop on sol instead of eth besides gas fees? Any sol dapp resources you could share?

    1. 1

      It's crashing down now! lol. I think it's well known now that developing on Solana is hard. The architecture takes some effort to learn and some more to code. Here's the place to start recommended by the founder of Solana: https://twitter.com/aeyakovenko/status/1432753260297801735

      1. 2

        It's crazy how much can change in a few weeks lol

        1. 1

          Huge rally yesterday, seems like September is bad for both stocks and crypto, lol

  2. 2

    Something that strikes me is the roughly $100B value of the USD stablecoins on this list. Just the value of a digital fiat-tracking token is enormous!

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