Solana's recent surge is not just price-related, with other metrics like on-chain activity and Google Search trends growing exponentially as well. What caused this impressive growth?
Solana Flipped Ethereum in Google Search Interest
Google searches for the term "Solana" surpassed "Ethereum" for the first time in 2023, indicating growing interest in the Solana ecosystem.
From December 17 to 23, Solana's search interest score reached 56, while Ethereum's was 50. Google Trends data suggests that Solana's search interest is set to peak during the week of December 24 to 30, with a score of 100.
Users searching for Solana also showed interest in terms like "bonk" and "tensor." Bonk (BONK) is the leading Solana memecoin that reached a peak market cap of $1.9 billion after being listed on Binance and Coinbase, while Tensor is the leading NFT marketplace on Solana, after surpassing Magic Eden in trading volume.
Solana’s DEX Volumes and NFT Sales Surpassed Ethereum’s
On December 23, Solana surpassed Ethereum in weekly decentralized exchange (DEX) volume and non-fungible token (NFT) sales.
DEX volume on Solana surged to over $10 billion, surpassing Ethereum's $8.8 billion for that week. Meanwhile, Solana also processed $109 million in NFT sales in that week, eclipsing Ethereum by $30 million.
At the time of writing, Ethereum is leading in terms of DEX volumes, with $10.12 billion compared to Solana’s $8.71 billion. However, Solana’s NFT sales volume is still ahead of Ethereum’s, although Bitcoin is leading due to the recent Ordinals frenzy.
The current frenzy on Solana is partly driven by memecoins, particularly BONK, which has skyrocketed by 300% in December and has a market cap of over $1 billion. Another Solana-based memecoin, Dogwifhat, has also gained 428% in the past week.
Solana Flipped BNB in Market Cap Momentarily
On December 22, Solana surged by 18% to overtake BNB (BNB), propelling it to 4th place in terms of market capitalization. SOL traded at a market cap of $41.9 billion, surpassing BNB, which had a market cap of $41.8 billion.
This surge came after SOL overtook XRP in market cap on December 21. However, BNB has since regained its position after gaining over 17% in the past week. BNB is currently trading at a market cap of $47.8 million, compared to SOL’s market cap of $43.7 million.
SOL gained over 71% in the past month, outperforming many large-cap cryptocurrencies such as ETH, which has only gained 12.4%.
What’s the Reason Behind Solana’s Recent Rally?
Solana's recent price surge can be attributed to several factors, including:
Increased User Activity
Active addresses on Solana have increased by nearly 400% in the last three months, surpassing Ethereum’s in mid-November. This suggests an exceptional increase in retail activity, with crypto users likely migrating to Solana for its lower transaction costs, increased speculative activity, airdrop farming and more.
Airdrops and Memecoins Caused Surge in DEX Volume
Recent airdrops on Solana, particularly the Jito (JTO) airdrop worth five figures, have resulted in more users flocking to other Solana-based protocols in hopes of securing a future airdrop. Furthermore, memecoins trading craze, led by the Bonk memecoin, have boosted speculative user activity, causing the DEX volume on Solana to surpass Ethereum’s for a week. Other memecoins on Solana, like Dogwifhat (WIF) and Silly Dragon (SILLY), also saw millions in daily volume on-chain, contributing to the rise in DEX volumes.
Institutional Capital Flows Into Solana
Source: CoinShares
Solana-based investment funds attracted $156 million in institutional inflows as of December 16, making it the crypto asset with the highest inflows behind only Bitcoin, suggesting robust institutional interest in Solana.
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