Solana is widely regarded as a promising blockchain project with strong fundamentals. If you are comfortable with the volatility and risks associated with Kaspa’s recent performance and believe in the platform’s long-term adoption and technological roadmap, it could be a worthy investment.
Gerhard – Bitcoin Strategy, a crypto YouTube channel with over 100,000 subscribers, provides an analysis of whether Solana is a smart investment, although it is not financial advice.
Gerhard from Bitcoin Strategy YouTube channel believes that many investors fundamentally misunderstand what investing is really about. He explains that investing isn’t simply about making money, but rather about making money compared to the risk you take on.
The focus should be on risk-adjusted returns, and he argues that Solana currently presents a compelling opportunity where the risk-adjusted returns might exceed average market outcomes.
The cryptocurrency analyst admits he was previously pessimistic about Solana just weeks before his analysis, but that pessimism actually proved profitable for his trading strategies. His approach centers on what he calls relative valuation bets, where the focus isn’t on US dollar valuations but on how assets perform relative to each other.
Gerhard demonstrates this concept using a chart showing Solana’s performance relative to Ethereum. He entered a short position on April 13th, betting that Solana would underperform Ethereum, and closed the position on May 20th. This single trade transformed $43,000 into almost $60,000, purely based on Solana performing worse than Ethereum during that period.
Solana’s Market Position and Potential Upside
The Bitcoin Strategy host examines Solana’s dominance in the overall cryptocurrency market, noting that it has been trading within a range between 2.2% and 3.6% of total market capitalization over the past few months. Currently sitting at the lower end of this range, Gerhard suggests Solana could outperform the broader market by approximately 40%.
He points out that while Solana initially grew significantly due to the pump.fun ecosystem and memecoin trading, the dynamics are shifting. Although pump.fun transaction numbers have plateaued, non-pump.fun related transactions on the Solana network continue to grow. This indicates that the broader Solana ecosystem is expanding beyond just memecoin speculation.
Gerhard highlights that Solana has achieved something unique compared to other blockchains. While the overall decentralized finance market across all chains hasn’t reached new all-time highs since the 2021 DeFi summer, Solana specifically has set new records. When measuring total value locked in SOL tokens rather than dollar terms, the growth appears more consistent and sustainable.
The analyst notes several positive indicators for Solana’s fundamental health, including high trading volumes on decentralized exchanges, growing numbers of returning users, and continued stablecoin inflows rather than outflows. These metrics suggest genuine utility and adoption rather than mere speculation.
The Raydium Opportunity Within Solana
Gerhard identifies what he considers an even better opportunity than simply investing in Solana directly. He focuses on Raydium, a decentralized exchange that has become the fastest-growing protocol on the Solana network. Raydium has hit new all-time highs in total value locked and represents what he sees as a more targeted investment approach.
The key insight from Gerhard’s analysis involves understanding why someone would choose Raydium over Solana, just as they might choose Solana over Bitcoin. Each step up the risk ladder potentially offers higher returns. Raydium is riskier than Solana, which is riskier than Bitcoin, but this risk hierarchy can translate into greater potential rewards.
He explains that Raydium previously underperformed Solana by 94% due to tokenomics issues, specifically massive expansion of the circulating supply. However, this supply expansion has now stopped, allowing the token’s price to finally reflect its underlying growth and utility. With no new Raydium tokens hitting the market, the fundamentals can drive price appreciation.
Gerhard’s calculations suggest that if Raydium outperforms Solana by 150% and Solana outperforms the broader market by 40%, Raydium could potentially outperform Bitcoin by 3.5 times. In a scenario where Bitcoin remains stable, this could push Raydium above $8, surpassing its previous highs from earlier in the year.
Read Also: How Much Could 5,500 Kaspa Tokens Be Worth in 2026?
The Bitcoin Strategy creator acknowledges that cryptocurrency markets reflect what he calls unregulated reality, where most gains flow to a small number of people and assets while the majority lose money. He argues that broad diversification in crypto often leads to poor performance because anyone can launch a token without barriers to entry, leading to widespread fraud and poor tokenomics.
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The information provided on Web3parrot.com is for general informational purposes only and are opinions of the expert writers. They are not intended as financial, investment, or trading advice. Please do your own research and consult with a licensed financial advisor before making any financial decisions.
