The cryptocurrency Solana (SOL) has gained popularity in recent years, mainly due to its fast and inexpensive blockchain technology. But a recently published analysis by the renowned Standard Chartered Bank is now making headlines: If Donald Trump becomes US president again, the price of Solana could increase fivefold by the end of the year.

How does this forecast come about, and what are the driving factors behind a possible price increase?

Trump’s influence on the crypto markets

Donald Trump has made it clear during his presidency and also in the current election campaign that he has a rather positive attitude towards Bitcoin and other cryptocurrencies. Trump, who once said that the US dollar could lose strength if the US does not embrace digital currencies, is seen by many in the crypto community as a potential catalyst for a crypto boom.

That is mainly because he already announced during the election campaign that he would reduce regulatory pressure on the crypto industry and steer the US more towards blockchain technology and cryptocurrencies.

A Trump victory in the presidential election could therefore create a positive environment for cryptocurrencies, giving the markets a new boost. Solana in particular, which is increasingly positioning itself as a strong alternative to Ethereum, could benefit from this.

Why Solana?

Solana is often referred to as the “Ethereum killer” because it offers a blockchain that is faster and more scalable than Ethereum. The network can process up to 65,000 transactions per second, while transaction costs are minimal compared to Ethereum. This makes Solana attractive to many developers and DeFi projects. In addition, the Solana ecosystem is growing in popularity among NFT projects, which is giving the price of SOL an additional boost.

However, according to Standard Chartered’s analysis, there is another reason why Solana could benefit particularly strongly: its connection to institutional investors. If institutional investors such as hedge funds and asset managers push more into the crypto market due to looser regulation under Trump, Solana could become one of the preferred investments due to its technological advantages and its already existing infrastructure in the financial sector.

An environment for growth

In addition to the political landscape, economic factors could also play a role. Standard Chartered predicts that under a second Trump presidency, the US key interest rate could be cut further. Lower interest rates make cryptocurrencies and other speculative investments more attractive because they offer higher returns than traditional investments such as bonds. This could motivate institutional and private investors to shift their capital into cryptocurrencies such as Solana.

The demand for innovative blockchain solutions will also continue to grow as more and more companies and developers look for fast, secure and cost-effective platforms for decentralized applications (dApps). Solana is able to meet this demand and could thus consolidate its position in the market.

Do not ignore risks

Of course, this forecast is not without risks. The crypto market is known for its volatility, and political developments are difficult to predict. While a Trump victory could certainly provide positive momentum for Solana and other cryptocurrencies, it remains unclear how other political actors – such as the US Congress – will behave. Regulatory uncertainties and potential market manipulation could also slow down the expected upward trend.

Conclusion: Solana in the fast lane?

The prediction that Solana price could quintuple by the end of 2025 is quite optimistic. It is based on a combination of technological advantages, growing adoption, and a potentially crypto-friendly political environment under Trump. Investors who believe in Solana’s potential could make significant gains in the next few years – provided the political and economic environment develops as expected.

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Ethereum (ETH) rival Solana (SOL) is seeing a “dramatic increase” in professional investor allocations this year, according to a new survey conducted by the digital assets manager CoinShares.

CoinShares polled 64 investors worldwide who cover a combined $600 billion worth of assets under management.

The respondents include different investor types including wealth managers, hedge funds, institutions, family offices, financial advisors and individual investors.

Explains CoinShares,

“Investors have been broadening their exposure to altcoins, with Solana seeing a dramatic increase in allocations. Looking through the survey responses, this is due to a few large investors allocating, carrying more weight in the survey.

XRP has seen a significant decline, with none of the survey respondents holding it now.”

 

Digital assets represented an average of 3% of the respondents’ portfolios, the highest weighting since CoinShares’ survey began in 2021.

Explains the firm,

“Unsurprisingly, some of the largest contributors to this were allocation from institutional investors who finally had the ability to gain exposure to bitcoin via the US ETFs.”

CoinShares notes that investors who have refrained from purchasing digital assets cite regulation as the number one factor in their choice not to invest.

“We had expected this to fall, but it is clear from the survey there remain significant barriers to entry to the asset class for specific cohorts of investors – these are typically in the wealth management or institutional space.

Fewer investors believe digital assets lack a fundamental investment case.”

SOL is trading at $135.12 at time of writing. The fifth-ranked crypto asset by market cap is down over 6% in the past 24 hours.

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• Cardano’s hard-fork event in February to increase Cardano’s interoperability with Bitcoin, Ethereum, and other blockchains.
• ADA might react bullishly to the upcoming upgrade.

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Cardano’s next upgrade will tentatively take place on February 14, 2023. The hard-fork is said to bring new built-in functions to Plutus, the smart contract programming language for the Cardano blockchain. This new upgrade will bring support to ECDSA and Schnorr cryptographic signatures to make it easier for developers to build cross-chain apps.

There will be another hard-fork event in February. CIP-0049 will increase #Cardano‘s interoperability with #Bitcoin, #Ethereum, and other blockchains. Plutus developers can write an application that can verify ECDSA and Schnorr cryptographic signatures.

— Cardano YODA (@JaromirTesar) January 26, 2023

The two cryptographic signature techniques, ECDSA and Schnorr signatures, are employed by multiple blockchains. Among which are the Bitcoin and Ethereum blockchains.

However, Cardano utilizes the fast, safe, and compact Edwards-curve Digital Signature Algorithm (EdDSA). But, this signature is incompatible with ECDSA and Schnorr signatures.

The Cardano upgrade will make it simpler for developers to collaborate with other blockchains by enhancing interoperability and enabling secure cross-chain DApp development.

The ECDSA and Schnorr signatures will be supported by the brand-new built-in features that Plutus will offer. Enabling simplicity for programmers to create cross-chain apps and ensuring the highest level of security.

The entire Cardano ecosystem has been making preparations for some time, with successful integration testing.

With more than 80% of block-producing nodes running the necessary new node, this technology is almost ready to be implemented on the Cardano mainnet. The incoming modification has already been communicated to exchanges, and developers of DApps have been surveyed to assure compatibility. The update is anticipated to occur on February 14, 2023.

Cardano community foundation will keep the community informed on new developments prior to the tentative date. You can follow the Cardano CF channels for the most recent information.

How will ADA react to the Upgrade?

ADA is the native token for the Cardano ecosystem. It’s a reflection of the economic activities, perception, acceptance, and valuation of Cardano’s ecosystem. ADA as a token is highly influenced by fundamentals, of which the upcoming hard-fork is a part.

Cardano had its major Vasil hard-fork in September 2022. Amidst the bullish expectations of investors and traders to “sell the news,” ADA plummeted rather than appreciated. It dropped by 9.5% a few days after the successful upgrade. It was further hurt by the Fed news trading at $0.43 at the time.

Whether ADA will react positively is unknown, but the upgrade brings a lot of positive changes to the Cardano ecosystem.

As of now, market sentiment towards Cardano’s CIP-0049 sends a strong bullish bias. The interoperability and ease of development it adds to Plutus, Cardano’s smart contract programming language, is a major upgrade. Cardano is doing everything it can to preserve the long-term value and utility of its blockchain and token.

Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.

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