- Solana is rekindling its old Ethereum-killing reputation with its recent run.
- Analysts predict record price gains for both Solana and Ethereum in 2025.
- Solana's savvy moves have primed it for growth.
For years, Solana was dubbed the Ethereum-killer, a blockchain that would leapfrog the original decentralised finance ecosystem by working faster and cheaper.
While the moniker was often dismissed as hyperbole, Solana has made a series of big gains on its older rival this year.
And now analysts are eyeing 2025 as the year when Solana will mount its most serious challenge yet to Ethereum.
“We could expect networks that produce a much higher economic value to double or triple in their valuation,” Karim Saber, an analyst at 21.co, a digital asset manager, told DL News.
Twice as good as Ether
Solana’s coin, SOL, has soared 130% this year, and hit an all-time high of $263 on November 22, according to CoinGecko.
The performance is almost twice as good as Ether, which has recorded a 68% increase this year and is still a ways off from its peak of $4,878 in 2021.
Moreover, Solana has demonstrated its nimbleness by hosting a raft of red-hot memecoins, which spurs the value of SOL and burnishes the project’s brand with retail investors.
“The growing preference for Solana reflects its advantages in speed, scalability, and ecosystem development,” Francisco Oliva-Velez, the managing partner at Plaintext Capital, a web3 investment company, recently told DL News.
Ethereum still dwarfs Solana, of course, on a number of metrics.
With a total value locked (TVL) of $57 billion, Ethereum has eight times the deposits of Solana, according to DefiLlama. It also hosts 1,080 protocols compared to Solana’s 194.
But Solana is cranking up the mojo. Its TVL has soared almost 80%, to $9.4 billion, in the fourth quarter compared to a 61% hike for Ethereum.
‘Solana is telling a story that smart money is coming this way.’
— Eliézer Ndinga, 21.co
More than anything, Solana’s performance caps a period of savvy business moves and technological improvements.
The bevy of outages that bedevilled the blockchain appear to have been remedied thanks to devs’ heavy duty work under the hood.
And by processing 65,000 transactions per second compared to Ethereum’s 15, Solana is making a bid to win over institutional clients.
“Solana is telling a story that smart money is coming this way,” Eliézer Ndinga, head of strategy at 21.co, recently told DL News.
Over the past few months, Bitwise, VanEck, 21shares, and Canary Capital have filed to launch Solana ETFs.
Meanwhile, asset managers have been souring on Ethereum this year and they dropped their weightings of Ether to 26% in October from 63% in June, according to Crypto Insights Group.
Ethereum ETFs
Whether all this momentum translates into a true bid to topple Ethereum from its perch won’t become clear for some time.
And investors are warming up to Ethereum as the autumn rally deepens into winter.
Inflows in Ethereum ETFs have strengthened over the last five days, and analysts are predicting Ether could jump to $10,000 in 2025.
“I expect we will have massive momentum from the entire Ethereum ecosystem,” said Michael van de Poppe, the CEO of MN Consultancy.
Retail users
But SOL, too, is expected to make its own leap to $1,000 next year.
And Solana, which has hot demand for its new mobile phone arriving in 2025, looks good compared to other Ethereum rivals that offer far less functionality, said Saber.
“The crazy valuations we saw for technically ghost chains like Cardano and Ripple echoes this belief,” Saber told DL News.
Yet Solana’s primary strength is its appeal to retail users.
Almost a fifth of portfolio managers say Solana’s sleek user interface and speed is paying off. Plus its accommodation of memecoins such as Chill Guy, Pnut, and Goatseus Maximus.
“Retail investors will be onboarded through Solana,” Saber said.
Pedro Solimano is a markets correspondent for DL News based in Buenos Aires. Contact the author at psolimano@dlnews.com.
