Sol Strategies (CSE: HODL), often considered the “MicroStrategy of Solana”, has soared 87% in the past week and extended its YTD gains to nearly 400%. Here’s a deep dive into the company and whether it will become as big of a player as MicroStrategy.

What Is Sol Strategies?

Sol Strategies is a Canada-based holding company that invests in the Solana blockchain and ecosystem. It rebranded itself last month from Cypherpunk Holdings Inc. to Sol Strategies. Its CEO, Leah Wald, said the move would help the company “capitalize on the growth potential within the Solana ecosystem.”

Notably, it was among the first publicly traded companies to have invested its treasury assets in Bitcoin, and with the rebrand, its shareholders get an indirect exposure to its holdings and staking of Solana. Shareholders would also get exposure to the investments that Sol Strategies would make in Solana-based projects and infrastructure in the future.

This is extremely rare for public companies. A handful of firms have a bit of Bitcoin on their books but very few give exposure to the Solana ecosystem.

How Does Sol Strategies Work?

Sol Strategies invests in the Solana ecosystem and stakes its SOL to earn a bit of interest and help support the Solana network. The company runs a validator node that verifies transactions and produces new blocks, requiring significant amounts of staked SOL. It then earns rewards based on the validator’s performance which adds to its SOL holdings since these rewards are in the form of SOL tokens.

Investors are clearly loving the company’s new strategy of investing in the Solana ecosystem, judging by the stock’s recent parabolic price action.

Sol Strategies price chart

Sol Strategies Recent News

On October 2, Sol Strategies announced that it had recovered Canadian dollars (CAD) 825,450 (US $611, 494) in the form of USDC from Lucy Labs after the recovery of capital held at FTX under the bankruptcy proceedings of the crypto exchange. It was a premium over the $500,000 investment that Sol Strategies wrote off in December 2022 after FTX filed for bankruptcy. The company used these funds to acquire 4,341.80 SOL at an average price of CAD 191.77, which brought its total holdings to 105,249.82.

On October 15, Sol Strategies announced a significant increase in the SOL delegated to the company’s public validator, boosting staking rewards in return.

As of that day, its owners had delegated 225,158.82 SOL to its validator for staking. Of these, 105,288.99 SOL were delegated by Sol Strategies while the remaining were delegated by third parties.

“The increased stake is a direct result of our team’s operational excellence, strategic planning and dedication to maintaining top-tier validator performance. This milestone highlights Sol Strategies’ commitment to the Solana network and reinforces its role in supporting the protocol’s growth and decentralization for the long term,” said Wald.

Sol Strategies (HODL) Stock Technical Analysis

HODL stock is looking strong on the charts and trades above the key moving averages which signals an uptrend. However, after the steep rally over the last week, its 14-day RSI (relative strength index) has risen to 87 which signals “overbought” levels in the short term. It remains to be seen if it can continue its rally in this territory.

Is Sol Strategies Becoming the MicroStrategy of Solana?

There are many publicly traded companies investing in the Bitcoin ecosystem. MicroStrategy, for instance, held 244,800 Bitcoins in mid-September – the company’s founder Michael Saylor revealed in a tweet. The company has been gradually adding to its Bitcoin kitty and has been raising capital to fund its Bitcoin investments. It is the largest corporate holder of Bitcoins, thanks to its continued (large) purchases of the digital asset.

The stock has gained 16x since 2020, far exceeding the gains of not only the S&P 500 Index but also that of Bitcoin itself, as its bet on digital assets was validated by the steep rise in cryptocurrency’s price.

While Bitcoin remains the biggest and most popular cryptocurrency with a market cap of over $1 trillion, Solana is also among the top 5 with a market cap of around $70 billion.

Sol Strategy is a microcap company with a market cap below 100 million CAD. However, the stock has gained quite a bit of traction as its Solana strategy works wonders and hypes up investors. Can HODL one day become the MicroStrategy of Solana? We’ll have to wait and see, but the company seems headed in that direction, and it has already become the first major validator of the Solana ecosystem in a publicly traded firm.

That said, as with other crypto plays, Sol Strategy could also remain volatile as digital assets, in general, tend to be more volatile than stocks.