cryptocurrency solana has received the support of Bank of America (BofA), but with the approval of the institution there has also been a drop in its price in which it seems that investors have made a good statement by selling with the news.
Since the position of BofA about what solana has the potential to become Visa of the ecosystem of digital assets”, the price of the cryptocurrency has fallen from 157 dollars to 143 dollars, sinking its valuation by 5.5 percent despite the good future prospects granted by the US bank.
The decline in the price of the cryptocurrency that currently stands at fourth position in the Coinmarketcap ranking by market capitalization, however, is unlikely to lead investors to disregard it as part of their portfolio, given the promise of BofA that solana can take market share from ether, the second most important cryptocurrency.
BofA’s commitment to solana
Solana’s market capitalization is 44,000 million dollars, still far from the 382,000 million of ether, which has seen record growth in the last year.
in the eyes of BofA, however, solana may become the reference cryptocurrency for processing payments in video games, or in the world of NFTs, thanks to its ability to process operations at a speed and cost that are far from its competitors.
According to the financial institution’s report, solana’s blockchain technology allows for about 65,000 transactions per second with average fees close to 0.00025 dollars, while maintaining its decentralized system and security.
These benefits, together with the fact that more than 400 projects have joined the solana network since its launch in March 2020, facilitating the settlement of more than 50,000 million transactions, are what supports Bank of America to describe the cryptoasset as “the Visa of the digital ecosystem.
Cryptocurrencies seek their own identity away from bitcoin
The solana is often compared to ether because, as can be seen from the report by BofA, the purpose of both cryptocurrencies is more focused on assuming a role as the engine of smart contracts that move decentralized finance, compared to a bitcoin whose value has shifted more towards a store of value asset.
Despite the fact that the drop in solana occurred almost in sync with the publication of the report on Bank of America, a broadening of the focus also shows that the cut in the cryptoactive market has been the majority in the last day.
Solana, therefore, may be just as much of a victim as ether of investors’ tendency to lump all cryptocurrencies in the same bag.
The Depasify CEO Alberto Mazaira, explained in finance.com podcast that the first thing a new investor in the crypto market who wants to enter, for example, in the two projects should do is “study a little more” about them.
Mazaira believes that it is important for the investor to understand the projects of each of the cryptocurrencies and make investments “with common sense”.
What Mazaira does not consider to be “acceptable” is that “everyone understands that you open an account and put money into a savings plan every month, and yet, because my neighbor told me to put money into the bitcoin, goal 5,000 euros”.
“The next day it drops 40 percent, and what a laugh,” says Mazaira. And the market, for the moment, does not indicate that this general taxonomy of all crypto assets has been overcome.
The fall of bitcoin knocks down the market
In this context, the national director of bitpanda in Spain, Alejandro Zala, explains in his analysis of the week that the first two weeks of the year have not been the best for bitcoin or the cryptocurrency market.
“The general trend was down, with some deep drops. The total crypto market capitalization fell to around €1.75 trillion, losing around €200 billion in the last seven days,” it notes. Hall.
He further adds that over the past week “the crypto market was mostly swinging sideways, but took a dip on January 6, when the price of bitcoin dipped to €35,000, followed by the rest of the market.”
Thus, the cryptocurrency market continues to oscillate mainly to the rhythm set by the main cryptocurrency, but banks and investment funds begin to set their preferences, and Bank of America has chosen solana.