Solana (SOL) Projected to Outpace Ethereum (ETH) and Bitcoin (BTC) by 2025
According to a recent report by British multinational bank Standard Chartered, Solana (SOL) is on track to lead the cryptocurrency market in growth by 2025. The bank forecasts that Solana could see a five-fold increase in value, especially if Donald Trump wins the upcoming U.S. presidential election. The report highlights that Solana may outpace major cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC), showing remarkable growth potential in a dynamic digital asset market.
Standard Chartered’s Valuation Metrics: A Comparative Analysis of Solana and Ethereum
Geoffrey Kendrick, the Global Head of Digital Assets Research at Standard Chartered, presented new valuation metrics focusing on layer-1 blockchains, particularly Solana and Ethereum. His analysis involves comparing Solana’s current market capitalization with Ethereum’s historical indicators, emphasizing Solana’s growth potential in the coming years.
The report states that:
- Market cap-to-fees ratio: Solana’s market cap-to-fees ratio is currently at 250x, significantly higher than Ethereum’s 121x ratio.
- Growth Potential: Solana’s future growth is anticipated to reach between 100 to 400 times its current transaction throughput.
This high valuation underscores the market’s expectations of Solana’s growth, with Kendrick suggesting that Solana’s rapid expansion could be further supported under a Trump administration due to the former president’s pro-digital asset stance.
Contrasting Token Supply and Staking Yields of Solana and Ethereum
While Ethereum has long held the lead among layer-1 blockchain networks, Solana’s increasing market activity and rising token value raise the question of whether Solana could eventually overtake Ethereum. However, Standard Chartered highlights potential valuation concerns, suggesting that SOL might currently be overvalued in comparison to ETH.
The report compares key metrics that could influence both networks’ performance, including:
- Token Supply Growth: Solana’s token supply increases at a rate of 5.5% per annum, compared to Ethereum’s much lower rate of 0.5%.
- Staking Yields: Ethereum currently offers a staking yield of 2.3%, which is higher than Solana’s 1% yield.
Standard Chartered’s analysis suggests that these metrics contribute to Ethereum’s relative strength, especially in the context of developer engagement. Approximately 38% of blockchain developers are working on Ethereum’s ecosystem, while only 9% are focused on Solana.
The Impact of U.S. Presidential Election on Crypto Regulations
Standard Chartered’s report also explores the potential effects of the upcoming U.S. presidential election on cryptocurrency regulation. A key finding is that a Trump administration could create a more favorable environment for the crypto market, increasing the likelihood of spot-based Solana exchange-traded fund (ETF) approvals.
If former president Donald Trump wins the election, Standard Chartered analysts expect:
- A more positive regulatory environment for cryptocurrency as a whole
- A significant boost in Solana’s performance, possibly outpacing both Ethereum and Bitcoin
Conversely, if Kamala Harris takes office, the report predicts tighter regulatory policies that may favor Bitcoin, with Ethereum and Solana following suit under more stringent guidelines.
Standard Chartered’s Optimistic Forecast for Cryptocurrency Market
Despite varied political scenarios, Standard Chartered remains broadly optimistic about the cryptocurrency market’s future. The bank projects that Ethereum could reach $7,000 by the end of 2025 under a Harris presidency and up to $10,000 if Trump remains in power. Meanwhile, Bitcoin is expected to soar to $200,000 by the same year-end, regardless of the election outcome.
In summary, Standard Chartered’s report presents an in-depth analysis of Solana’s projected growth relative to Ethereum and Bitcoin, examining valuation metrics, staking yields, and the impact of the U.S. presidential election on regulatory policies. The forecast underscores a potential for substantial gains in the cryptocurrency market, especially if favorable regulatory shifts support Solana’s growth trajectory.
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