Solana Positioned for Potential ‘Crazy Pump’ Fueled by Inflation Reduction and ETF Hope, Analyst Suggests
A well-known cryptocurrency analyst has expressed a bullish outlook for Solana (SOL) in the long run, pointing to an impending network upgrade as a significant driver.
An Epoch in this context represents a defined timeframe within which crucial network processes, including governance discussions, protocol updates, and related activities, are determined and implemented.
Furthermore, InvestAnswers contends that the favorable outlook for Solana, currently ranked as the sixth-largest cryptocurrency by market capitalization, is amplified if the U.S. Securities and Exchange Commission (SEC) were to approve a spot exchange-traded fund (ETF) dedicated to Solana.
The analyst elaborated, “…they are initiating a vote to curtail inflation on the Solana network. While Solana’s existing inflation is not particularly high, the proposed measure would reduce it dramatically from about 4.8% to roughly 0.86%.
If this proposal is adopted, and indications suggest its likelihood, with voting concluding at the end of Epoch 755… its implementation would position Solana as potentially the most deflationary layer-1 asset.”
He further drew a comparative point, stating, “Consider that Bitcoin’s inflation rate is at 0.85%. If this proposal passes, Solana’s inflation will be virtually identical at 0.86%.
My key question then becomes, what might happen if a Solana ETF were to materialize? Given the extensive staking of SOL and limited availability on exchanges, we could potentially witness an extraordinary price surge.”
Solana Price Could Surge on Inflation Cut, ETF Analyst Says
Addressing potential concerns about decreased staking rewards resulting from the proposed inflation reduction, InvestAnswers clarified, “It is a common concern that reduced inflation might lead to diminished staking rewards.
However, the underlying mathematics suggests that the anticipated price appreciation of Solana would significantly outstrip any decrease in staking rewards.”
He concluded by emphasizing the priority of price appreciation for investors, posing a rhetorical choice: “Consider the choice between an asset’s price doubling from $120 to $240 versus an asset remaining at $120 while earning a 6% or 8% annual staking reward.
The clear preference is for substantial price appreciation, as this will have a far greater impact than staking yields.”
Also Read: Solana Price Targets Awaiting Breakout
