Financial services firm Cantor Fitzgerald has initiated coverage for public companies with Solana treasuries. In a note to the client, the firm’s analysts gave the coverage an overweight rating, suggesting that the companies are trading at a premium.
According to the analysts led by Thomas Shinske, Solana has the potential to become the leading blockchain for digital finance, with more applications likely to surface on the network. Thus, they expect this will boost the value of companies holding SOL.
The analysts wrote:
“With increased liquidity making it easier to raise capital, Solana treasury companies can follow the ‘Saylor playbook’ and raise capital at a premium to NAV, purchase SOL, and increase SOL-per-share.”
The coverage covers the three public companies with SOL treasuries: Sol Strategies (HODL), Upexi (UPX), and Defi Development (DFDV). Currently, their stocks are trading at C$2.48, $9.84, and $31.06 respectively. However, the analyst has set a price target of C$54 for HODL, $16 for UPX, and $45 for DFDV.
According to Shinske, these companies can provide investors with exposure to SOL with tax benefits. He added that these companies can combine SOL treasuries with staking, allowing them to grow their SOL/share faster than BTC treasury companies.
Interestingly, he identified DFDV as the best-positioned SOL treasury company due to its access to the US capital markets and crypto-native management team, noting that the company could raise $250 million at a 250% premium on average.
However, he noted that Sol Strategies is the most forward-thinking SOL treasury company. Even though the company is not currently listed in the US, the analyst noted that it is already in the final stages of a US listing. This is the first time a Wall Street analyst will cover SOL treasury company.
Cantor analysts say SOL is a better treasury asset than ETH
Meanwhile, the Cantor analyst noted that Solana will outperform Ether because Solana technology is far better than Ethereum’s on every metric. Thus, it will be a future chain of choice for on-chain finance.
As proof of this, the firm noted that developer growth in Solana has recently exceeded Ethereum’s and expects the trend to continue. Thus, they believe it makes more sense for companies to adopt SOL for their treasury over ETH.
They added that companies that have chosen SOL for their treasuries believe that the asset could one day flip Ethereum despite ETH’s market cap currently having 2.5x its market cap.
Interestingly, the analyst did not place Solana on the same level as Bitcoin, noting that Bitcoin has established itself as a foundational reserve asset. Still, a bet on treasury today is an investment in its long-term growth as the transactions network.
They wrote:
“If BTC has solidified itself as the foundational reserve currency, or asset, for the digital economy, Solana aims to be the technology that powers transactions and marketplaces in the digital economy.”
The research note represents a significant endorsement of Solana at a time when the network has seen activity drop. This decline, due to reduced interest in memecoins and the growth of transaction volume on the BNB Chain due to Binance Alpha, has led some experts to be bearish on the network.
Standard Chartered analysts noted last month that Solana might be a one-trick pony if it cannot use its advantage to attract other use cases where low-cost and high-speed transactions are required.
More companies are buying SOL for treasuries
Meanwhile, Cantor’s note appears to push more companies to adopt an SOL strategy. The latest to do that is Hong Kong-listed MemeStrategy, which bought 2,440 SOL tokens for around $369,000.
Despite its minimal investment, the announcement was enough to send its stock soaring more than 28%, reaching HK$2.70. The company has also stated that it plans to provide SOL staking services and is bullish on Solana’s long-term potential.
However, the faith in Solana has not yet been reflected in SOL performance, with the token down 3.24% in the last 24 hours, falling to $151.21. The token has decreased 11.74% in the past 30 days, declining 21.46% year-to-date.
