Solana will go live on Coinbase Pro on May 24, after defying the crypto market crash this week to reach a new all-time high of US$58.30 three days ago.
As Bitcoin, the king of crypto plummeted to around US$30,000 this week and the entire crypto market shed over a trillion dollars in total market cap, Solana was seemingly unfazed by the storm around it — solidifying gains when traded against Bitcoin and helping to protect the funds of crypto investors who took refuge in the DeFi token.
Solana is a smart contract blockchain platform being touted as one of the leading contenders with the potential to steal Ethereum’s crown in the decentralized finance space — offering cheaper and faster transactions.
According to an announcement yesterday, Solana will go live on Coinbase Pro on May 24, and the world’s largest cryptocurrency exchange has already enabled SOL deposits. The major U.S. exchange will feature five trading pairs for the SOL token: USD, EUR, USDT, BTC and GPB.
Coinbase Pro is the second American exchange to list SOL following Binance.US, which listed SOL in September of 2020.
Following the Coinbase announcement yesterday, Solana’s price rallied from around US$45 to US$50 minutes later. SOL is now the 15th largest cryptocurrency with a market cap of around US$12 billion.
The Solana project has seen a number of promising developments recently, building out an ecosystem of new projects, landing major investments, and becoming interoperable with other networks. Solana is also supported by prominent crypto figures like Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX.
Solana DeFi’s crypto crash
Solana is currently trading at around US$44 and up over 6% since a slight retracement from its 24-hour high of US$50, which immediately followed the Coinbase announcement.
The price of altcoins usually trend closely to the price of Bitcoin (BTC), and as such tend to rise and fall with the price of the original cryptocurrency. Needless to say, Bitcoin had quite the tumble this week falling from its weekly high of US$51,438 to a low of US$30,681.50, according to CoinMarketCap.
However, along with the rise of meme-driven trading, paradoxically the crypto industry has matured and many other blockchains have begun to generate their own unique value in the ecosystem, breaking correlation with the Bitcoin price.
“Bitcoin’s Flash crash, which many in the space believe was manipulated by whales, has washed out many speculators and traders who came into Bitcoin and other markets because of Tesla, Elon Musk, GME or Doge, and they were washed out. Solana is not driven by the same mainstream,” said Ben Caselin, head of research and strategy at AAX exchange, in an interview with Forkast.News.
“Technically Solana is one of the most-high performing blockchains on the market; there are many developers involved and projects being built on Solana, including Raydium, Mango Markets and Step.Finance,” Caselin added. ”Contrary to what we may find on Binance Smart Chain or even Ethereum, these projects are less hype driven and speak to a more seasoned community of crypto investors.”
Another factor has been Bitcoin’s waning dominance, which is at a three-year low. BTC is now responsible for just 40% of the overall crypto market cap, as Ethereum and other altcoins like Solana grow more in popularity and importance by the day.
“Ethereum and altcoins have been outperforming Bitcoin for not just the past several weeks, but actually several months,” said Justin d’Anethan, sales manager at Equos exchange, in an interview with Forkast.News. “If you look at the Bitcoin dominance charts, it’s been going down a lot.”
With regulators cracking down on crypto firms in the U.S. but also regulators digging into Binance’s activity on potential money laundering and tax offense charges, and, more recently China also warning of potential regulations for corporates using crypto payments, investors might be looking at alternatives, d’Anethan said. “By alternatives, I mean non-payment transactions and coins that instead focus on the various use cases of blockchain technology.”
DeFi token tilt but Bitcoin for safety
Along with Solana, other decentralized finance (DeFi) tokens also held their ground — namely Polygon’s MATIC token and Harmony’s ONE.
“We saw SOL, MATIC and ONE rise and an overall DeFi tilt as the market looks for layer 2 solutions or projects that broadly support users, companies or the crypto sphere itself,” d’Anethan said.
Polygon is a platform for building and scaling decentralized applications and has found a firm foothold right at the center of explosively growing DeFi space. Last week alone, it added 75,000 new users and US$1 billion in transaction volume and also reached a new all-time high of US$2.18 on May 18.
Caselin of AAX was not surprised as “Polygon’s rise has been expected as they progress in offering solutions for Ethereum.”
Meanwhile, Harmony’s ONE token also weathered the crypto market crash remarkably well and came within just 2 cents of its all-time high, with a price of US$0.18 on May 19.
While the DeFi tokens SOL, MATIC and ONE shone this week, d’Anethan of Equos said that Bitcoin is still regarded as the safest cryptocurrency in the space for investors.
“It’s worth noting that the crash pushed investors back to the safety of BTC” said d’Anethan, adding that Bitcoin has marked the strongest recovery since the crypto price bloodbath on May 18 and is now trading back up around US$40,000.
