YouHodler chief of markets Ruslan Lienkha and risk manager Sergei Gorev were asked about recent movements in the cryptocurrency world, including Circle’s IPO and Solana price movements. YouHodler is a firm that offers a wide range of Web3 Fintech services to ensure a seamless connection between fiat and crypto financial assets.
How does Circle’s upcoming IPO impact USDC and CBDCs?
“Circle’s IPO is anticipated to indirectly boost USDC’s standing by enhancing the company’s transparency and reliability, thereby attracting potential new USDC users. This could potentially position USDC as a viable alternative to CBDC in the future. The IPO’s attractive P/E ratio might also pique the interest of investors. Media reports estimate the company’s valuation to be between $5 billion and $9 billion, with a projected revenue based on an interest rate of 4-5%. While revenue percentages may decrease over time due to potential interest rate cuts in the U.S., the absolute revenue is expected to grow as USDC’s capitalization expands,” said Lienkha.
What is behind SOL’s recent movement, and what’s next?
“The price of SOL has been rising since the beginning of the month, with the potential to reach a local maximum of around $210. This positive trend is driven by recent heightened activity on the Solana blockchain, which has surpassed Ethereum’s activity levels. However, meme coins on the Solana chain generate much of this activity, whereas Ethereum hosts numerous projects with real-world economic use cases. Therefore, Solana’s growth, driven primarily by meme coins, is limited. The chain needs to attract more substantial and serious projects for sustained growth,” stated Lienkha “In my view, Solana has the potential to be the next growth beneficiary of the crypto market. While this may not materialize in the current cycle, it could be a significant player in the next one.”
Solana is steadily gaining market share and is gradually catching up with the leading member of the crypto community, Ethereum. The company is actively developing, overcoming all the challenges of technological growth. Key metrics for Solana, such as average daily DEX volume and average daily NFT volume, are on the rise, as are average daily fee payers and active validators.
“Recently, news emerged that Solana overtook Ethereum in weekly fee revenue for the first time. This event is very encouraging. In addition, Solana is a reasonably promising project in terms of development and scaling from the inside, while Ethereum is developing mainly with external L2 solutions,” Gorev shared.
“Currently, the market capitalization of Ethereum is about $400 billion, while the market price of Solana is only $85 billion. Growing up from $400 billion is much more difficult than growing from $85 billion. In this case, there is a low base effect, which will help the SOL quotes to become significantly higher in the future. In addition, remember that in the future, the market estimates the probability of a SOL ETF to be sufficiently high, which will also increase the company’s value.”