VanEck Report Claims Solana Undervalued, Can Reach 50% of Ethereum’s Market Value

By Aaron Feuerstein September 26, 2024 In DeFi, Ethereum, Solana
Close up of golden Solana cryptocurrency with colorful chart background
Source:AdobeStock
  • Solana could soon rival Ethereum, capturing up to 50% of its market value, according to a report by VanEck’s Market Vector.
  • Despite lower institutional interest, Solana has higher transaction volumes, more daily users, and significantly cheaper fees.
  • Predictions suggest Solana could soar to a value of AUD 482, potentially positioning it as a leader in the DeFi sector.
  • Ethereum still leads in developer engagement and ecosystem depth, but Solana’s rapid growth is noteworthy.

According to a recent report by VanEck’s Market Vector, Solana could soon reach as much as 50% of the market value of Ethereum.

Solana, touted the Ethereum-killer, is already the fifth largest crypto by market cap, currently trading for US$147.88 (AU$216.42) compared to ETH’s US$2,575 (AU$3,768), according to data from CoinMarketCap.

Top seven cryptocurrencies by market cap, source: CoinMarketCap                             

Related: PayPal Enables Businesses to Buy, Hold and Sell Crypto

Solana’s Technological Capacity to Push It Higher

The report suggests that despite institutions not showing much interest in Solana, it has the potential to outshine Ethereum. They cite Solana’s higher volume of transactions, cheaper fees and more daily users for their bullish stance on the blockchain:

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Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and its transaction fees are nearly 5 million percent cheaper.

VanEck’s Market Vector

Data reported by Crypto Rand supports that thesis. It shows that Solana’s volume on decentralised exchanges (DEX) surpassed that of Ethereum, while it also has ten times more daily active addresses.

SOL Could Reach AUD 482, Position Itself as DeFi Leader

Despite these key metrics speaking for Solana, the report points out that Solana’s market cap is still only 22% of Ethereum’s, with the gap widening when including Ethereum’s extensive array of layer-2 solutions.

But this could soon change, based on forecasts, the report estimates SOL could reach half of Ether’s market cap and a whopping AUD 482:

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 USD 330 […] suggesting a possible seismic shift in the cryptocurrency landscape if this market cap increase occurs.

VanEck’s Market Vector

Related: Kamala Harris Promises to Make US “Dominant in Blockchain”

However, there is a metric where Ethereum takes the cake, and that is developer activity. As data from Artemis shows, Ethereum has by far the most developers, sub-ecosystem and weekly commits. While Solana has 710 weekly devs and 322 sub-systems, Ethereum shines with 2,944 and 1,540 respectively.

Top 11 for dev activity across 1,400 ecosystems, source: Artemis

But then again, Ethereum has of course had a lot more time to attract that sort of engagement and has arguably a first-mover advantage. The report believes that while retail is slowly warming up to Solana, institutions are still largely sitting on the fence.

Aaron Feuerstein
Author

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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