This crypto will be the Solana of 2023

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One of the most touted cryptos to debut in 2022 was Aptos (CRYPTO: APT), a layer-1 blockchain network that some called “the next Ethereum (CRYPTO: ETH)” and “the next Solana (CRYPTO: SOL)” to the right out of the door. The token came with a world-class team of developers, huge hype, and hundreds of millions of dollars in venture capital funding.

Unfortunately, Aptos hit the crypto market on October 19, just days before the collapse of FTX (CRYPTO:FTT). Add to the fact that much of its venture capital funding came from former FTX CEO Sam Bankman-Fried and you can see why traders dropped the token like a hot potato. Aptos debuted at $9, hit a high of $10.25 in its first week, then fell to $3.07 before the end of the year.

So what can we expect from Aptos in 2023?

Similarities Between Aptos and Solana

In 2021, being called “the next Solana” would have been the ultimate compliment for a cryptocurrency. At that time, Solana was one of the hottest cryptos, praised for its fast transaction processing speeds and rapidly growing ecosystem. In a direct comparison to Ethereum – which was still gearing up to achieve The Merge – Solana looked like a potential winner. Additionally, Solana came with the imprimatur of endorsement from Sam Bankman-Fried, who still enjoyed his reputation as a legendary figure in the crypto world.

Image source: Getty Images.

Fast forward to 2022, however, and the situation was turned upside down. Yes, Solana was still one of the fastest blockchains on the planet, but it was also experiencing increasing periods of network outages, and some questioned its scalability. Then came the first market crash of the year, and suddenly all bets were off. After Ethereum managed to complete The Merge without any hitches, Solana’s outlook has darkened further. And once the FTX crash hit in November and investors realized just how much Bankman-Fried played a role in starting Solana, Solana went into a tailspin – and it’s no wonder. By the end of the year, Solana was down almost 95%.

This is why the similarities between Aptos and Solana are so troubling for investors. Aptos also came to market promising to be the fastest layer-1 blockchain network. It also had the backing of Bankman-Fried, which helped Aptos lead a $150 million Series A venture funding round in July 2022. And it came with a world-class developer team that had migrated from Meta Platforms (NASDAQ: META). This is the same team that helped build the Diem blockchain project for Meta (then known as Facebook), giving crypto an impeccable pedigree. The future looked bright for Aptos.

Two scenarios for Aptos

At the start of 2023, Aptos has the potential to be either the Solana of 2021 or the Solana of 2022. In the first scenario, the price of Aptos could skyrocket as traders dig into the numbers and realize how much point crypto could be undervalued. . Currently, Aptos has a market cap of just $490 million, about one-ninth the size of Solana, which now has a market cap of $4.5 billion. If Aptos really is “the next Solana”, shouldn’t its market cap be closer? There could be significant value here.

Aptos stands out from its competitors by focusing on large enterprise-class customers who want to implement huge blockchain projects. As Aptos notes, its blockchain was “built with billions in mind.” It’s the same technology used to create a production-grade blockchain for Facebook, which has billions of users worldwide. Solana has had its share of network outages throughout 2022, so the ability to access a fast, scalable, and robust blockchain network from Aptos could be attractive to larger enterprises.

In the second scenario, however, the price of Aptos could decline further throughout 2023. Just as Solana sank 95% in 2022, Aptos could take a tough and volatile descent as crypto investors systematically withdraw all “Sam coins” from their wallets. Now that Ethereum seems to have brushed off Solana’s challenge, can investors really be expected to give Aptos, which has only had a few months to establish itself in the crypto market, a big chance? Investors might decide that Aptos really is “the next Solana” – then rush to the exits in their effort to get out before the crypto drops to zero.

Is Aptos a buy?

In many ways, Aptos offers a lesson in caution for traders hoping to get into “the next hot crypto”. Often the reality doesn’t live up to the hype. Right now, Aptos is too new for me to give it a buy recommendation, and it just hit the market at the wrong time. If Aptos had debuted in 2021, we might not even be having this discussion. Instead of talking about the “next Solana”, we could talk about the “next Aptos”.

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Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Dominic Basulto holds positions at Ethereum. The Motley Fool holds posts and recommends Ethereum, Meta Platforms, and Solana. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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