According to a recent report from VanEck Market Vector, Solana’s ($SOL) technical strength could push its market capitalization to half that of Ethereum ($ETH). The report also predicts that Solana’s price could rise to $330, which would represent an increase of more than 50% from current levels.
The report mentioned, “According to third-party research, Solana has the potential to reach 50% of Ethereum’s market capitalization, predicting the price of SOL at $330. These predictions come from technical models available on platforms such as TradingView, which indicate that if the market capitalization increases, the cryptocurrency The landscape may change dramatically.”
Specifically, blockchain Layer 1 outperforms Ethereum in key metrics such as transaction capabilities, user base, and transaction fees.
The report points out that Solana processes more transactions than Ethereum. Solana can process thousands of transactions per second (TPS), which is 3,000% higher than Ethereum’s TPS. Its daily active users are also 1,300% higher than Ethereum. Solana’s transaction fees Also cheaper than Ethereum. Over the years, Solana has positioned itself as a strong competitor to Ethereum with its enhanced efficiency and scalability.
The report’s authors believe Solana’s clear advantages in speed and cost efficiency give it greater potential than Ethereum for payments and remittances. Stablecoins in particular are considered a major driver of decentralized finance activity and can leverage Solana’s superior processing metrics to pass cost savings on to users.
However, the report highlights that Solana’s market capitalization is still only 22% of Ethereum’s. Ethereum has a market capitalization of more than $313 billion, while Solana has a market capitalization of about $70.6 billion, according to CoinGecko.
While retail investors are slowly realizing the benefits of Solana, institutional adoption has been slower. There are several factors at play here, including Ethereum’s first-mover advantage, broader institutional familiarity, and hesitancy to move large amounts of capital away from existing assets like ETH.
The report states that in terms of institutional adoption, Solana lags behind Ethereum in terms of institutional investment, as Ethereum’s lead has made it a familiar choice for institutions. Additionally, even if Solana offers advantages, institutions may be hesitant to move large amounts of money away from existing assets like Ethereum.
However, rotation is an important strategy in the market. Assets can overheat, and even bull markets have moments of pullback or correction. Institutions that do not move to undervalued assets, such as Solana, could miss out on significant opportunities. Likewise, holding assets without considering market changes can be dangerous. Investors must always be prepared for the emergence of new competitors, especially in the rapidly evolving world of cryptocurrency.
The report recommends that investors should consider diversifying across multiple L1 blockchains, including Ethereum and Solana, to reduce risk and capture upside. The growth of decentralized finance, stablecoins and payments are key drivers for Ethereum and Solana adoption in the long term, the report said. Recent developments in decentralized exchanges and stablecoin trading demonstrate the expanding use cases for cryptoassets.
〈VanEck Research Prediction: Solana ($SOL) is expected to rise to $330〉 This article was first published on "Blocker".
