Crypto Wrap: Solana Plunges On Network Outage

Bitcoin and ether prices edged higher, while Solana plunged 20% week-over-week.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

Cryptocurrency prices edged higher this week, led by gains in bitcoin and ether. A rocky start to the bitcoin-as-legal-tender era in El Salvador pushed prices for the world’s most valuable cryptocurrency sharply lower last week.

But buyers stepped in, keeping the rout from becoming something bigger. Between last Friday and this Friday, bitcoin climbed from $45,000 to $47,500. At the same time, ETH rebounded from $3,250 to last trade around $3,450.

Prices for both coins are well above their summer-time lows, but still have a ways to go to reach their all-time highs set this spring:

 

Bitcoin

 

Ether

 

Solana Summer Winds Down
While bitcoin and ether consolidate, another coin went on a wild ride this week. Prices for SOL, the native cryptocurrency of the Solana blockchain platform, plunged 20% this week due to a 17-hour network outage.

According to various reports, the outage was the result of a flood of transactions that overwhelmed the network. Bots attempting to participate in an initial token offering pushed transactions per second on the network to as much as 400,000—way above the 65,000 transactions per second Solana can handle. Unable to cope with the load, the network effectively shut down until a software upgrade was released.

The incident reflects the growing pains of a young blockchain platform that many have high hopes for. While considered less decentralized than Ethereum, Solana can currently process far more transactions per second—65,000 versus 15.

Nevertheless, even the highly scalable Solana couldn’t keep up with this week’s load. It remains to be seen whether the new software upgrade will prevent future traffic spikes from overwhelming the network.

The recent outage has taken some of the wind out of SOL’s sails, though notably, prices for the cryptocurrency are still up a whopping 76x from where they started the year.

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.