This article is also available in Spanish.
Currently, Solana (SOL) is the fifth largest cryptocurrency, with a market capitalization of approximately $71 billion. Following the latest decision by the US Federal Reserve to reduce interest rates by 0.50% on September 18, the cryptocurrency market has seen a resurgence of investor confidence, leading to a significant increase in the price of SOL.
As a result of these developments, asset management company VanEck, through its research arm MarketVector, issued strong predictions about Solana’s future. I report highlights Solana’s technological advances and raises questions about its current market position compared to Ethereum (ETH).
Solana Market Cap can reach $157 billion
VanEck’s analysis reveals significant differences between Solana and Ethereum, especially in performance metrics. Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and offers almost 5 million percent lower operating fees.
However, despite Solana’s high performance, its market capitalization it is only 22% of Ethereum, which currently stands at $314 billion. This disparity is even more apparent when considering the combined work of Ethereum and its Layer 2 (L2) solutions, which tend to improve trading power.
Related Reading
Based on this report, there is a growing hope that Solana can reach 50% of Ethereum’s market cap, which would mean jumping from the current $71 billion market to $157 billion for the fifth largest cryptocurrency.
In addition, the study notes that The price of SOL it can reach the mark of $ 330, which shows an increase of almost 120% of the cryptocurrency. This may indicate a potential peak in this market cycle and a new all-time high for the token, far from the current record high of $259 in the 2021 bull run.
VanEck Warns of Missing SOL Opportunities
The report also notes that the roles of decentralized finance (DeFi), stablecoins, and payments are key factors in the adoption of both Ethereum and Solana. Lending and lending in the DeFi space is expected to grow rapidly. At the same time, Solana’s cheap fees and fast turnaround times make a strong case for its acceptance in fees and costs.
The asset manager believes that if institutions and everyday users can benefit from low-cost services, Solana’s user base can grow significantly, further strengthening the ecosystem and its use.
Related Reading
However, the report says that while retail investors are beginning to see the benefits of Solana, the adoption of the institution has been slow. Factors contributing to this include Ethereum’s initial profitability, greater institutional familiarity and a general reluctance to exchange valuable funds for well-established assets such as ETH.
Still, VanEck points out that institutions that “ignore non-core assets” like Solana, risk missing important opportunities. The company concludes that sticking to established assets without considering emerging competitors can be harmful to cryptocurrency.
At the time of writing, SOL was trading at $152, up 3.3% and nearly 20% over the past 24 hours and seven days, respectively.
Featured image from DALL-E, chart from TradingView.com