Will This Ethereum Challenger Be the Next Crypto to Explode?

Key Points

• Sui is an up-and-coming Ethereum challenger that recently hit a new all-time high in January.

• New spot ETFs could be coming for Sui in October.

• The formation of new Sui treasury companies could add upward pressure to the price.

• 10 stocks we like better than Sui ›

On the surface, Sui (CRYPTO: SUI) looks like a very unappealing investment. The cryptocurrency is down almost 20% for the year, and now trades 35% below its all-time high of $5.35 from January. To say that 2025 has been a difficult year for Sui would be an understatement.

Yet, during the past 90 days, Sui has kept pace with Bitcoin (CRYPTO: BTC), the market benchmark cryptocurrency. So all is not lost yet. In fact, two new catalysts could send Sui much higher during the next few months, making it a potentially explosive crypto investment opportunity right now.

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What is Sui?

Many first-time crypto investors may not be familiar with Sui. It's a smart contract Layer 1 blockchain network, similar to Ethereum (CRYPTO: ETH).

The one big difference is that Sui is blazingly fast when it comes to transaction processing speeds. According to a 21Shares report from last year, Sui can process a mind-boggling 297,000 transactions per second. Ethereum, for its part, struggles to process 30 transactions per second.

Moreover, Sui comes with an impressive pedigree. The team's founders have extensive experience in Silicon Valley, including work on cryptocurrency projects at Meta Platforms (NASDAQ: META). And the company behind the Sui cryptocurrency, Mysten Labs, has raised more than $300 million in venture capital financing to build out the Sui blockchain ecosystem.

Sui actually launched with much fanfare back in May 2023. But that was during the very end of the previous crypto winter, so it never gained as much traction as some initially hoped.

All eyes on the new spot crypto ETFs

The first catalyst for Sui involves the imminent launch of new spot Sui exchange-traded funds (ETFs). These ETFs, just like the spot Bitcoin ETFs in 2024, could lead to an immediate market rally for Sui. If approved, these ETFs would give big institutional investors a new way to get exposure to Sui, without having to dip their toes directly into the crypto market.

The growing consensus is that the Securities and Exchange Commission will approve a batch of new spot crypto ETFs sometime in mid-October. The two cryptocurrencies at the top of the approval list are XRP (CRYPTO: XRP) and Solana (CRYPTO: SOL). That makes sense, given that they rank as the third and sixth largest cryptocurrencies in the world, based on market cap.

But Sui, ranked as the 14th largest cryptocurrency with a $12.3 billion market cap, is no slouch either. And in fact, many crypto ETF watchers expect a number of different altcoins to get spot ETFs alongside XRP and Solana. Sui, of course, is one of the names often mentioned. Two investment firms have already submitted applications to the SEC for spot Sui ETFs.

The rise of SUI treasury companies?

The next major catalyst is the sudden appearance of SUI treasury companies. These are modeled on existing Bitcoin, Ethereum, Solana, and XRP treasury companies. The business model of these publicly traded companies is simple: raise money from outside investors, put that money to work with splashy buys of one specific cryptocurrency, and watch your stock price go up.

The company I'm keeping my eyes on is Sui Group Holdings (NASDAQ: SUIG) which ranks as the largest Sui treasury company in the world right now, with more than $350 million in the crypto on its balance sheet. The company, formerly known as Mill City Ventures, raised an astounding amount of capital -- $450 million -- at the end of the summer just to accumulate Sui.

Given how successful the Bitcoin and Ethereum treasury companies have been, it would not be surprising if new Sui treasury companies are able to follow in the footsteps of their success. That, in turn, could create a virtuous circle: companies buy up Sui, the price of Sui goes up, new companies emerge to buy up Sui, the price of Sui goes up even more...

What could possibly go wrong for Sui?

Of course, it's certainly not an ironclad guarantee that everything will go Sui's way during the remainder of 2025. In a worst-case scenario, the SEC might not approve the spot Sui ETF applications, deeming them too risky and speculative. Moreover, the crypto treasury company trend might turn out to be a hugely inflated crypto bubble.

But Sui is arguably one of the hottest Ethereum challengers out there. It has been referred to as a potential Solana killer. And Solana, in turn, has often been referred to as a potential Ethereum killer. That gives you an idea of just how big Sui's upside might be. Solana is currently 10 time bigger than Sui, and Ethereum is 45 times bigger than Sui, in terms of market cap.

We've already seen a number of huge breakout cryptos this year, including XRP. Could Sui be the next crypto that's unleashed? If you are looking to turbo-charge the performance of your crypto portfolio in 2025, Sui could be worth a closer look.

Should you invest $1,000 in Sui right now?

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Dominic Basulto has positions in Bitcoin, Ethereum, Solana, Sui, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Meta Platforms, Solana, Sui, and XRP. The Motley Fool has a disclosure policy.