U.S. investment manager VanEck projected that the price of Solana could reach $520 by the end of 2025, which would mark a significant increase from its current trading value. VanEck utilized an autoregressive forecast model to estimate that Solana's market capitalization will hit approximately $250 billion, based on around 486 million floating tokens. This price target implies a 165% increase from the current price of $195.5.

Solana, the fifth largest cryptocurrency by market capitalization, has seen a 102% rise in the last 12 months, reaching a market cap of $94.1 billion. VanEck's valuation of Solana is based on its projected year-end market share within the smart contract platform market. The firm's forecast for the smart contract platform market cap is linked to the growth of the U.S. M2 money supply, which has historically correlated with crypto market capitalization.

Despite VanEck analysts' history of ambitious predictions, such as a retracted forecast for Cosmos's ATOM token, the firm stands by its current projection for Solana. VanEck anticipates the U.S. M2 money supply will reach $22.3 trillion by year-end, with a 3.2% annual growth rate. Concurrently, the smart contract platform market is expected to grow by 43% to a record $1.1 trillion. Solana's share of this market is predicted to increase from 15% to 22%, supported by factors such as developer dominance and rising market share in decentralized exchange volumes, revenues, and active users.

The Solana blockchain's growth is partially attributed to the popularity of Solana-based memecoins. In November, the network saw over 135 million active wallet addresses. VanEck has disclosed that it holds positions in Solana and clarified that its price prediction is not an endorsement to buy or sell the cryptocurrency. The firm has also applied to the SEC to launch a spot exchange-traded fund based on Solana, coinciding with the SEC's recent call for public comments on a similar application by Grayscale.

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