While Bitcoin remains at the forefront of institutional interest as a key digital asset, recent research indicates that even a minor investment in Solana (SOL) can significantly enhance portfolio efficiency.
A study by Capital Markets, utilizing Bitwise data, demonstrated that incorporating a small percentage of Solana could improve risk-adjusted returns in a standard 60/40 portfolio of stocks and bonds.
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How Solana Allocations Produce Strong Returns
The analysis showed that a mere 1% allocation to SOL increased annualized returns to 10.54%, with a Sharpe ratio of 0.696.
The report further revealed that raising the allocation to 2.5% enhanced returns to 16.64% and yielded a Sharpe ratio of 1.093. A 5% allocation achieved returns of 26.22% with a Sharpe ratio of 1.412.
Capital Markets also highlighted that a 10% higher-risk allocation would elevate annualized returns to 43.88%, achieving a Sharpe ratio of 1.687.
The findings indicate that strategic SOL exposure can enhance long-term portfolio performance, though diversification altered these results.
Dividing a 10% crypto allocation evenly among Bitcoin, Ethereum, and Solana led to annualized returns of just 19.87%. This figure is notably less than half of what Solana achieved independently.
In contrast, a 50:30:20 distribution among Bitcoin, Ethereum, and Solana produced 16.18% returns, while smaller 5% and 2.5% allocations tracked steady yet moderate improvements of 11.33% and 8.84%, respectively.
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“Maximum drawdowns were relatively contained across allocations, even as returns sharply increased,” stated Capital Markets.
In light of this, the firm concluded that concentrated Solana exposure resulted in higher returns, while a diversified portfolio presented smoother, steadier growth.
Solana’s on-chain fundamentals clarify its performance advantage.
The network is recognized for its low transaction fees and high throughput, processing nearly 96 million daily transactions in Q1 2025 amid the excitement for meme coins.
Simultaneously, the blockchain has experienced significant institutional adoption and user growth in sectors like payments, gaming, and consumer applications. Importantly, Solana ranks as the second-largest decentralized finance ecosystem, holding over $11 billion in total value locked.
This growing ecosystem continuously bolsters SOL’s investment attractiveness. Its efficiency and scalability establish it as a viable next-generation blockchain for decentralized applications.
Additionally, as speculation intensifies around a potential US spot Solana ETF, the asset is increasingly central to conversations about crypto’s evolving role in modern portfolio theory.
