Solana could reach 50% of Ethereum’s market cap, VanEck predicts

Share this article

Solana’s technological performance could propel its market cap to half that of Ethereum, according to a recent report from VanEck’s Market Vector. The report also predicts that Solana’s price could rise to $330, a 50% increase from current levels.

“Based on third-party research, Solana has the potential to reach 50% of Ethereum’s market cap, with predictions placing SOL at a price of $330,” the report reads.

“These forecasts are derived from technical models available on platforms such as TradingView, suggesting a possible seismic shift in the cryptocurrency landscape if this market cap growth occurs,” it added.

As detailed, the Level 1 (L1) blockchain outperforms Ethereum in key metrics such as transaction capabilities, user base, and transaction fees.

Solana processes 3,000 percent more transactions than Ethereum, has 1,300 percent more daily active users, and offers transaction fees that are nearly 5 million percent cheaper, the report said. For years, blockchain has positioned itself as a strong competitor to Ethereum due to its increased efficiency and scalability.

However, Solana’s market cap remains only 22% of Ethereum’s, the report points out. Data from CoinGecko shows that Ethereum’s market cap is over $313 billion, while Solana’s is around $70.6 billion.

Some of the reasons behind this are slow institutional adoption and reluctance to rotate capital.

The report points out that when it comes to institutional adoption, Solana lags behind Ethereum in terms of institutional investment, as Ethereum’s inception established it as a familiar choice for institutions.

Furthermore, institutions may be hesitant to move large amounts of capital away from established assets like Ethereum, even though Solana offers advantages.

The report suggests that investors should consider diversifying their investments across multiple L1 blockchains, including Ethereum and Solana, to mitigate risk and capture profit.

In the long term, the growth of decentralized finance, stablecoins and payments is a key driver of adoption for both Ethereum and Solana, according to the report. Recent developments in decentralized exchanges and stablecoin transactions indicate expanding use cases for crypto assets.

Share this article