It's experiencing an influx of interest, and it's rising to the occasion.
Solana (SOL -2.04%) isn't a household name in the way that Bitcoin is, but that might not be the case for much longer. With a growing base of investors, more upgrades to the chain's technology, and a whirlwind of trading volume that's accelerating by the day, it's one of the most exciting plays in cryptocurrency right now.
So let's examine four reasons Solana is the smartest cryptocurrency to invest in at the moment.
1. Transactions are cheap and fast
Especially in comparison to older blockchains like Ethereum, Solana's transactions are very inexpensive. Most of the time, transactions cost less than a half-cent. And they tend to execute within roughly a second or two, assuming the network isn't congested with traffic.
In contrast, Ethereum's gas fees -- fees for using the network -- fluctuate wildly, but are routinely in the tens of dollars. That makes it uneconomical to transact small amounts. Plus, transactions can take a few minutes to complete.
The thesis for buying Solana here is simple: Investors will gravitate toward parking their assets on the chains where they can transact more quickly and more cheaply than the alternatives.
2. The ecosystem of tools is solid and rapidly growing
It can be tough to invest in cryptocurrencies when you don't have the right software (and perhaps even hardware) tools to research coins, stash your cash, transact, track your profits and losses, and transfer assets from other blockchains if necessary. Even something basic like price and volume data is not guaranteed to be readily within reach, especially when considering that many coins are listed on decentralized exchanges (DEXs).
Solana doesn't have any paucity of data sources or tools, and in fact there's more than one option for essentially everything that the typical investor needs to be successful, not to mention a plethora of solutions for more advanced applications.
If you want a hardware wallet for maximum security storage, there's the Ledger Nano X, the SafePal X1, and others. For software wallets, Phantom is the most popular choice, though many people prefer Backpack or Solflare. In terms of finding basic data sources on coins new and old, there's Birdeye, DexScreener, CoinGecko, and many more sites, all available for free.
The Solana ecosystem also has more than one project that helps coin holders to stake their tokens or lend them to a liquidity pool. That means if you don't like the yields offered on a decentralized service like Jupiter, you can check with a competitor like Raydium and potentially find a better deal.
And there are more utility projects launching every day, which is a big green flag for Solana's rising popularity and merits as an investment to say the least.
3. It's the meme coin chain
Solana is the blockchain where the vast majority of meme coin projects exist.
Today's most popular meme coins like Dogwifhat and Bonk got their start there, and the past months have seen a veritable explosion of thousands of different initial coin offerings (ICOs). The vast majority of those projects immediately flopped or were outright scams, but quite a few were able to run their prices up to reach hundreds of millions of dollars in market cap, building a loyal community and capturing plenty of attention in the process.
If there will be another big run-up from a meme coin like there was with Dogecoin or Shiba Inu, it will almost certainly originate from Solana this time around.
It's easy to see why Solana is the preferred venue for meme coin investors. The fees are minimal, which means people can buy $5 or $10 worth of tokens without experiencing staggering transaction fees. Likewise, the typical speed of the transactions and the previously mentioned easy-to-use investing tools and data sources mean that there isn't too much friction to navigate.
But beware: Those great features also make it easy to fall into bad habits like trading in and out of the same coins over a short period of time.
Finally, Solana benefits from being the preferred chain of many of the cryptocurrency influencers who are in vogue right now on social media. In other words, the people with the most reach are preaching that it's the place to be, which can be a bit of a self-fulfilling prophecy.
If you want to capture growth from the meme coin gold rush, buying Solana and holding it is thus a straightforward strategy.
4. The network just got upgraded
On April 15, the Solana network got a much-needed upgrade that enables it to process more transactions. The reason for the update was quite simply that it was direly needed.
In mid-March, volume on the network reached nearly $3.5 billion in a day, with congestion causing many failed transactions for users. The culprit for that volume was a veritable frenzy of meme coin trading.
Other chains haven't experienced the same deluge of traffic. Nor have the governance groups of other chains shown the same aggressiveness and sense of urgency in making upgrades that tangibly improve the experience for users.
So, the network upgrade is indicative that Solana is a smart bet right now because it implies multiple positive things about where the chain is going.
Alex Carchidi has positions in Bitcoin, Ethereum, Shiba Inu, Solana, and WIF. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.
