Motley fool crypto pick

motley fool crypto pick

Cryptocurrencies witnessed a raging bull market last year. But investors inclined towards crypto plays cannot certainly bank on history. This incredible bullish run may or may not continue this year.

That said, there are certain blockchain networks worth taking a hard look at this year. One of the top tokens I’ve got my eye on right now is Solana (CRYPTO:SOL).

Here’s why Solana remains my top holding, and why I think 2022 could be a great year for this token.

Solana: A complete crypto package in itself

Like most other cryptocurrencies, Solana’s network does “the usual.” Investors can use Solana and its native token SOL to transfer money and as a store of value.

However, Solana’s unique proof-of-stake validation model (which is actually called a proof-of-history model) gives this network and edge over its competitors. Via sharding and this unique cryptographic method, Solana is able to post lightning-fast transaction times across its network. Additionally, Solana’s fees are among the lowest for large-scale networks. This is an obvious advantage.

Accordingly, Solana’s Solanart NFT marketplace has absolutely exploded. As the world of decentralized finance (DeFi) continues to grow, Solana looks to be a major player in this market. This network has been picking up market share at an amazing rate, and is often viewed as a top competitor to Ethereum.

Now, that’s impressive.

This network’s environmentally friendly validation model, low fees, and stated network capacity of 50,000 transactions per second is world class. I think this network is one with some serious potential as we look for winners in 2022.

Bottom line

Solana has become the fifth-largest cryptocurrency for a reason. With a market capitalization around $54 billion, Solana’s rapid rise is worth noting. After all, this is a cryptocurrency that has only been around since 2019. Zero to $54 billion is an incredible climb for any asset in such a short amount of time.

The thing is, seeing where Solana’s valuation is relative to Ethereum, there’s an attractive thesis with this token. If Solana can continue to capture DeFi market share, all bets are off with regards to how high this token can climb. This is the token I’m most bullish on right now.

With over 400 projects built on its blockchain, Solana is a booming crypto network in growth areas such as finance and gaming. As more projects are built on top of Solana’s blockchain, the valuation thesis with this token will become easier to understand for many investors.

In some respects, investors are still able to get in relatively early on this high-growth token, in my view. That said, like all cryptocurrencies, Solana carries significant risk. Accordingly, proper position sizing and risk management is always important with adding any crypto exposure right now.

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