VanEck, an investment firm, forecasts that the price of Solana (SOL) will reach USD 520 by the end of 2025, driven by increased demand for smart contract platforms (SCP) and growth in the M2 money supply over the coming months.

The M2 money supply, which measures the total amount of money circulating in the U.S. economy, is believed to have an impact on the cryptocurrency market. M2 includes cash, checking deposits, and money that is easily convertible, such as savings accounts and money market funds.

VanEck estimates that the M2 money supply will increase to USD 22.3 trillion by 2025, up from the current USD 21.5 trillion. When central banks increase the M2 money supply by lowering interest rates or through quantitative easing, more money circulates in the economy, enhancing liquidity and driving investments into riskier assets, including cryptocurrencies.

Additionally, the SCP market, where the Solana platform operates to create and execute smart contracts, is expected to grow by 43% to reach USD 1.1 trillion by the end of 2025. Currently, Solana holds about 15% of the total cryptocurrency market, but VanEck predicts that SOL's market share will rise to 22% by the end of 2025.

"We expect Solana's market share to increase to 22% by the end of 2025," said VanEck. "This projection is driven by the dominance of Solana developers, which increases its market share in terms of DEX volume, revenue, and active users," it added.

Using an autoregressive (AR) forecasting model, VanEck predicts that Solana's market capitalization will reach USD 250 billion, which would equate to a price of USD 520 per SOL, based on 486 million circulating tokens.