VanEck Predicts Solana Could Reach 50% Of Ethereum’s Market Cap, Targeting $330 Per SOL
September 25 2024 - 9:00PM
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Currently, Solana (SOL) is the fifth-largest cryptocurrency, with a
market capitalization of approximately $71 billion. Following the
recent decision by the US Federal Reserve to cut interest rates by
0.50% on September 18, the cryptocurrency market has seen a
resurgence in investor confidence, leading to notable price
increases for SOL. In light of these developments, asset management
firm VanEck, through its research arm MarketVector, has released
compelling predictions regarding Solana’s future. The report
highlights Solana’s technological advancements and raises
questions about its current market positioning compared to Ethereum
(ETH). Solana Market Cap Could Hit $157 Billion VanEck’s analysis
reveals significant differences between Solana and Ethereum,
particularly in performance metrics. Solana processes 3,000% more
transactions than Ethereum, has 1,300% more daily active users, and
offers transaction fees that are nearly 5 million percent lower.
However, despite Solana’s superior performance, its market
capitalization is only 22% of Ethereum’s, which currently stands at
$314 billion. This disparity is even more pronounced when
considering the combined activity of Ethereum and its Layer 2 (L2)
solutions, which often enhance transactional capabilities.
Related Reading: SUI Eyes $1.45 Retest Following Breakout: Will
Bulls Defend Support? Based on the report, there is growing
optimism that Solana could reach 50% of Ethereum’s market cap,
which would mean a jump from the current market cap of $71 billion
to $157 billion for the fifth-largest cryptocurrency. In
addition, the research notes that the SOL price could reach a mark
of $330, representing a rise of nearly 120% for the cryptocurrency.
This could represent a potential top for this market cycle and a
new all-time high for the token, a far cry from the current record
high of $259 in the 2021 bull run. VanEck Warns Of Missing
Out On SOL Opportunities The report also notes that the roles of
decentralized finance (DeFi), stablecoins, and payments are
critical drivers of adoption for both Ethereum and Solana. Lending
and borrowing in the DeFi space are projected to grow rapidly. At
the same time, Solana’s cheaper fees and faster transaction times
present a strong case for its adoption in payments and
remittances. The asset manager believes that if institutions
and everyday users can benefit from low-cost transactions, Solana’s
user base could grow significantly, further strengthening its
ecosystem and usage. Related Reading: Ethereum Gains On Bitcoin
Following Fed Rate Cut: Altseason Soon? However, the report argues
that while retail investors are beginning to recognize the benefits
of Solana, institutional adoption has been slower. Factors
contributing to this include Ethereum’s first-mover advantage,
greater institutional familiarity and a general reluctance to shift
significant capital from well-established assets such as ETH.
Still, VanEck points out that institutions that “overlook
undervalued assets” such as Solana, risk missing out on significant
opportunities. The firm concludes that holding on to established
assets without considering emerging competitors can be dangerous in
cryptocurrency. At the time of writing, SOL was trading at $152, up
3.3% and nearly 20% over the 24-hour and seven-day periods,
respectively. Featured image from DALL-E, chart from
TradingView.com
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