Sui (CRYPTO: SUI) has emerged as a breakout star in the rapidly evolving cryptocurrency market, climbing about 290% during the past year.
Its unique blockchain platform, designed to address scalability and user experience bottlenecks that have long plagued crypto, has proven transformative in building a growing ecosystem. Indeed, Sui is already the 11th largest cryptocurrency with a $13 billion market capitalization, just two years since its May 2023 launch.
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Let's discuss the factors driving this remarkable ascent and where Sui might be headed during the year.
Image source: Getty Images.
With more than 20,000 different cryptocurrencies available to investors, Sui distinguishes itself through its elite development team and robust financial backing.
The project was started by former Meta Platforms engineers after the company abandoned its blockchain-based digital currency, Libra (later renamed Diem), in 2022. Securing $336 million from high-profile investors, including Andreessen Horowitz, Binance Labs, and Coinbase Ventures, the Sui project gained immediate credibility with several breakthrough technological advancements.
Sui operates as an independent Layer-1 blockchain, meaning it runs on its own decentralized network rather than being tied to any other cryptocurrency. Its fixed supply of 10 billion Sui tokens enhances its appeal by promoting long-term value retention.
A key innovation lies in its object-centric model, which assigns all types of on-chain assets unique identifiers with defined ownership. This approach eliminates the need for complex smart contract interactions to manage ownership, a departure from the traditional account-based model used by prominent cryptocurrencies such as Ethereum and Solana.
As a result, Sui can handle parallel transaction processing, theoretically achieving up to 297,000 transactions per second (TPS) with 400 milliseconds of finality, referring to the time required for a transaction to be confirmed on the network and irreversible. These performance metrics surpass Ethereum's 15 to 30 TPS and confirmation times ranging from seconds to minutes, relying on Layer-2 solutions for improved efficiency. Solana performs better than Ethereum with 65,000 theoretical TPS and 900ms finality, but has experienced episodes of network congestion and instability.
Furthermore, Sui's architecture employs the Move programming language, recognized for its flexible and efficient framework designed to prevent security vulnerabilities and deliver more predictable performance. Sui's exceptional speed, scalability, and low fees make it ideal for real-time applications, including decentralized finance (DeFi) and next-generation gaming, driving platform development and ecosystem growth.
Robust metrics underscore Sui's growing utility and ability to attract users and capital from competing Layer-1 and Layer-2 blockchains.
The latest data shows Sui's total value locked (TVL), representing the value of all blockchain assets, including tokens and decentralized applications (dApps), at $2 billion, surging nearly 10-fold in just over a year from $212 million in January 2024. Though overshadowed by Ethereum, which leverages its decade-long trading history and platform maturity for a $60 billion TVL, Sui outpaces many alternatives in engagement share. Rising daily decentralized exchange (DEX) volume and daily active addresses (DAAs) reflect robust activity on dApps like Cetus, a concentrated liquidity DEX enabling efficient token swaps, and MemeFi, a gaming dApp capturing viral popularity.
Strategic advancements strengthening Sui's outlook include a partnership with Mastercard to facilitate virtual credit card spending via a Sui wallet at more than 20,000 European merchants. Additionally, multiple U.S. regulatory filings for Sui exchange-traded funds (ETFs) by firms like 21Shares and Canary Capital underscore Sui's expanding influence and broad-based appeal.
Despite the wild swings in financial markets this year amid a delicate economic environment, recent headlines suggest easing trade tensions have helped boost investor confidence and stabilize some asset classes. This backdrop of resiliency could be key for the Sui blockchain to continue growing, providing a tailwind for its price this year.
I'm bullish and predict that Sui can surpass its all-time high of $5.35 during the next year. Although the cryptocurrency remains speculative and faces the challenge of staying at the cutting edge of innovation in the highly competitive crypto industry, I believe the project is still in the early stages of its success. Ultimately, Sui has proven itself to be one of the most important cryptocurrencies in the market and deserves to be on your investing radar.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum, Mastercard, Meta Platforms, Solana, and Sui. The Motley Fool has a disclosure policy.