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Crypto: Solana, Stacks, and NEAR Boosted by the Hype, Should We Fear a Crash?

Fri 22 Dec 2023 ▪ 4 min of reading ▪ by Fenelon L.

Fueled by an unbridled speculative appetite, Solana, Stacks, and NEARprotocol have seen their online visibility explode recently. Their mentions on social networks have peaked, reflecting a crypto frenzy amplified by the fear of missing out (FOMO). However, this excitement also carries the threat of a sharp reversal.

Crypto SOL NEAR and Stacks in FOMO

Solana, Stacks, and NEAR in the Speculative Fever

Solana, Stacks, and NEAR Protocol are among the most popular cryptos these days, with social volumes on a sharp rise. According to Santiment, this momentum reflects an overflowing speculative interest and a FOMO phenomenon that could lead to overvaluation and a sharp reversal of prices.

Driven by a flourishing DeFi ecosystem, the SOL token has surpassed XRP in the crypto rankings by market capitalization, reaching $33.7 billion. The total value locked on Solana also crossed the symbolic billion-dollar threshold for the first time since the FTX collapse.

DEXs like Orca are recording record volumes, amplified by the hype around meme coins like Bonk. Attracted by the promise of quick gains, traders buy SOL before converting it into speculative tokens, fueling an upward spiral.

However, some experts warn of a potential crash of 40% by the new year.

Is Ethereum Slowing Down in the Face of Solana’s Ascent?

While Ether suffers from high transaction fees, its detractors are already predicting its demise in favor of competing chains such as Solana.

However, the fundamentals of Ethereum remain strong, with $28 billion of value locked and an apparent undervaluation. Its decentralized exchange volumes and NFTs also still vastly surpass those of Solana.

Indeed, the latter has made a significant breakthrough, with DEX volumes, stablecoins, and NFTs temporarily exceeding Ethereum. Some are already imagining Solana “overturning” the legacy blockchain in the long run. However, this scenario seems premature: Solana still only represents 5% of Ethereum’s Total Value Locked (TVL).

Although Solana’s current success is undeniable, a sudden bearish reversal remains possible given the level of speculation. As for Ethereum, its solid fundamentals remain a sign of long-term resilience, despite current challenges.

Towards a Reversal in the Crypto Market?

Beyond Solana, Stacks and NEAR have also benefitted from this speculative frenzy, with double-digit increases in their social volumes.

This unrestrained appetite for crypto risk, detached from fundamentals, signals an overall exuberance. Similar to the media hype surrounding meme coins on Wall Street, it exposes the market to a violent snapback.

In summary, while promising, Solana and its peers could quickly revert to pariahs in the event of the bursting of this speculative bubble. To navigate this volatile market, caution and rationality prove essential, rather than succumbing to the allure of herd mentality.

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.