Solana (SOL) is projected to lead the cryptocurrency market in growth by 2025, outpacing both Ethereum (ETH) and Bitcoin (BTC), according to a recent report
Standard Chartered has predicted that Solana (SOL) will lead the cryptocurrency market in growth by 2025, outpacing both Bitcoin (BTC) and Ethereum (ETH). In a recent report, the British multinational bank stated that Solana could rise five-fold in value, especially if Donald Trump wins the forthcoming US presidential election.
The bank's Global Head of Digital Assets Research, Geoffrey Kendrick, unveiled new valuation metrics for layer-1 blockchains, focusing on Solana and Ethereum. He compared Solana’s current market capitalization to Ethereum when it comes to several historical indicators. For instance, Solana’s market cap to fees ratio is 250x compared to Ethereum which is at 121x.
This high valuation is driven by market expectations of Solana’s future growth potential, which Kendrick anticipates will be in the range of 100 to 400 times the current throughput of Solana in the coming years. He believes that this growth potential is more likely to be realized under a Trump administration, given the president’s friendly disposition towards digital assets.
The report also highlights the contrasting token supply and staking yields of Solana and Ethereum. While Ethereum has maintained its position as the leading layer-1 blockchain network, Solana’s increased activity and token price appreciation have raised the question of whether the network might dethrone Ethereum soon. However, Standard Chartered suggests that SOL might be overvalued at the moment in comparison to ETH.
Solana’s token supply is increased at a rate of 5.5% per annum, compared to Ethereum’s 0.5% per annum. This directly affects real staking returns, with Solana having a yield of 1% and Ethereum having a yield of 2.3%. Another advantage that tips in favor of Ethereum is the presence of developers - 38% of blockchain developers work on the Ethereum ecosystem, compared to only 9% on Solana.
The report also analyzes how the U.S. regulatory policies may change in the aftermath of the elections. If the former president Donald Trump were to win, then the analysts predict a more positive environment for the cryptocurrency market, and increased possibilities of the approval of spot-based Solana exchange traded funds (ETFs).
Based on this assumption, SOL could do better than ETH and BTC. On the other hand, if the new government is led by Kamala Harris, then the regulation could be tighter, with bitcoin likely to lead, ethereum and solana to follow.
However, Standard Chartered remains optimistic about cryptocurrency in general, which is in contrast with the two previous forecasts. The bank believes that Ethereum will trade at $7,000 by the end of 2025 if Harris is the president and up to $10,000 if Trump is still in power. At the same time, Bitcoin is expected to jump to $200,000 by the same year-end, regardless of the election results.