Gate.io Blog Factors Driving SOL Price Rally

Factors Driving SOL Price Rally

29 November 10:29

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![](https://gimg2.gateimg.com/image/article/1690791857hotspot.jpeg)
## [TL; DR]
<a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> network is a blockchain of choice among crypto investors due to its scalability, speed and low transaction fees.

Recently, Cathie Wood, ARK Invest CEO, applauded Solana for its efficiency.

The Solana rally that started in mid-October has helped to push the value of Grayscale’s Solana Trust (GSOL) up.

## Introduction 
The Solana blockchain’s native cryptocurrency, SOL, has been rallying since mid-October. There are times when the demand for SOL becomes very high since the blockchain, ranked number 6 by market capitalization, is the second largest network associated with decentralized applications (dApps).

By the way, Solana is the greatest competitor for <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>. Today, we discuss the factors driving SOL’s price surge as well as its future prospects.

## Solana Crypto Briefly Touched $60 mark in November 
<a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana crypto</a> has been performing well since the beginning of the year. So far, its value has increased by over 550%. It gained the most in October when it rallied by around 200%. Although its bullish momentum decreased in November the market expects it to rise further as we approach the end of the year.

Whereas Solana gained by more than 550% this year the other major cryptocurrencies have not matched its momentum. The price of Ether (ETH) increased by about 70% during the same period. Similarly, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> gained by around 127%.

During its recent price rise the value of SOL briefly rose above $60. The current bullish pressure started on 24 October when most cryptocurrencies rallied. On the contrary, around this time in 2022 the <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana price</a> was fluctuating around $10 following the FTX collapse.

As a fact, the value of Solana has risen by over 500% since the US Securities and Exchange Commission designated it a security alongside <a href="/price/cardano-ada" target="_blank" class="blog_inner_link">Cardano</a>, Matic, Algo, and MANA File coin (FIL), among others. Basically, the Solana run began on 10 July the date the SEC labelled it a crypto security.

## “Solana is Really Doing Good” – ARK Invest CEO, Cuthie Wood
Recently, there was a unique factor that pushed the Solana price up, although for a short period. It was Cathie Wood’s, ARK Invest CEO, comment on the blockchain’s efficiency and low transaction costs.

In fact, on 15 November, [in an interview with CNBC](https://www.youtube.com/watch?v=kj95_DAc-Ao "in an interview with CNBC"), Wood praised the Solana blockchain for its unique infrastructure that results in scalability, transaction speed, high security and efficiency, among others. According to Wood, the blockchain is a major player in the crypto sector.

During the interview she said, "Solana is doing a really good job. Ether was faster and cheaper than bitcoin [back] in the day – that's how we got ether. Solana is even faster and [more] cost-effective than ether."

She even added that she "really does like Solana.” However, Wood also pointed out one of Solana’s greatest weaknesses, its consistent downtime during maintenance and outages.

She believes that Solana’s downtime is greater than Ethereum blockchain’s. However, according to her, that does not hinder investors from using the network.

She added, “People are willing to put up with that because maybe the transaction sizes are not as large or for some reason are not as important, they just want speed and cost as their top priority. Each one of [the networks] is going to have a place.”

## Factors contributing to SOL’s Upward Price Movement 
There are other key factors that have contributed to the Solana upward price movement. This is because investors do not just <a href="/how-to-buy/solana-sol" target="_blank" class="blog_inner_link">buy Solana</a> without strong reasons.

For example, Solana has witnessed a surge in new users, something that has created confidence in the cryptocurrency. That has also attracted traditional financial institutions like Grayscale to invest in SOL.

Of course, there has been an increase in the number of decentralized applications operating on the blockchain, which has led to a rise in demand for SOL and ultimately its price. The following diagram shows the recent spike in Solana price.
![](https://gimg2.gateimg.com/image/article/170122489115561701224598_.pic.jpg)
Solana’s Year-to-Date Price - TradingView

As you note from the diagram, from mid-October the Solana price soared significantly. That bullish momentum lured many investors to buy SOL in large quantities which created a brighter Solana future than ever before.

Decentralized exchanges that exist on the Solana blockchain influence SOL’s bullish momentum. In all, the trading volume of these exchanges surpassed $2 billion within 12 days, around mid-November.

Many crypto traders like to trade Solana due to its cost-effectiveness and transaction speed. As a result of its high demand, the investors also hold Solana which has increased its total value locked (TVL). Currently, Solana TVL exceeds $500 million and is set to increase as more investors purchase SOL and hold it.

These factors had a positive effect on the value of the Grayscale’s Solana Trust (GSOL) whose shares are trading at a premium that exceeds 800%. For example, on 10 November, the secondary SOL shares reached a value of $202 as the next picture shows.
![](https://gimg2.gateimg.com/image/article/170122491915571701224612_.pic.jpg)
Grayscale’s Solana Trust - Grayscale

The surge in the value of Grayscale Solana Trust shares has increased investor interest in the asset. For context, Grayscale Solana Trust (GSOL) is an Alternative Digital Assets exchange-traded fund (ETF).

## Conclusion 
Solana has been experiencing a strong rally since mid-October as it surpassed the $60 mark at one time. Many traders prefer Solana to the Ethereum network due to its cost-effective nature, fast transaction finality and efficiency. SOL’s positive price movement has led to a rise in the value of Grayscale Solana Trust.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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TL；DR

Introduction

Solana Crypto Briefly Touched $60 mark in November

“Solana is Really Doing Good” – ARK Invest CEO, Cuthie Wood

Factors contributing to SOL’s Upward Price Movement

Conclusion

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Factors Driving SOL Price Rally

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