Crypto investors expect big things from Bitcoin (CRYPTO: BTC) over the next couple of years. The largest cryptocurrency recently performed its fourth halving of mining rewards, just weeks after the Securities and Exchange Commission (SEC) approved 11 Bitcoin-owning exchange-traded funds (ETFs). Bitcoin prices are up by 124% over the last 52 weeks, and that bump is supposed to be the foothills of an upcoming mountain climb.
But Solana (CRYPTO: SOL) makes Bitcoin's recent gains look downright disappointing. The smart contracts platform with high performance and low fees has gained a staggering 476% in the same period.
Can Solana keep up this tremendous market momentum, or will the price trends look different in the next era? Should Bitcoin investors convert their digital assets into Solana coins instead? Let's take a look.
The Solana project wants to "bring blockchain to the people." The Solana blockchain platform can process smart contracts very quickly and with minimal processing fees. These qualities make it easy for app developers of every stripe to get into the Solana ecosystem and play around. Building a large developer community in this manner should lead up to plenty of useful and valuable projects over time.
Solana wants to help ordinary people around the world take control of their finances, their online experiences, and their assets. It's already a popular platform for managing non-fungible tokens (NFTs), which can track the ownership of any digital or physical asset.
Eventually, this philosophy could make Solana a crucial component of the Web3 and decentralized finance communities. This blockchain network was engineered for speed and efficiency, based on the founding group's background in building cell phone networks.
This vision is very different from Bitcoin's role as a digital currency, focused on wealth management and value protection. Bitcoin builds value by offering limited access to an intentionally rare digital asset. In contrast, Solana becomes more valuable as people build and use applications on its developer-friendly platform.
So the two cryptocurrencies have a few qualities in common, but they were built for very different purposes.
It should also be said that Solana started its year of Bitcoin-beating returns from an artificially low point. The digital currency found itself involved in the FTX crypto-exchange meltdown, and investors were slow to forgive Solana for that connection. Both Bitcoin and the S&P 500 (SNPINDEX: ^GSPC) stock market index have outperformed Solana if you stretch the comparative chart to a three-year perspective.