According to data from CoinGecko, among the top ten major cryptocurrencies by market value, Solana (SOL) has registered considerable gains over the past seven days (7.5%), even surpassing Bitcoin’s 1.8% growth.
According to VanEck, at press time, SOL is trading for $155 and appears ready to extend its bullish momentum to hit $330 and reach 50% of Ether’s market capitalization.
Solana Beats Ethereum In Key Areas
In a Sept. 25 report, VanEck’s research department, MarketVector, noted that Solana has beaten Ethereum in several important areas. For instance, the report’s authors observed that Solana has a high throughput and can process thousands of transactions per second, which is roughly 3,000% higher than Ethereum’s TPS.
Moreover, Solana boasts 1,300% more daily active users than Ether, and its transaction fees are “5 million percent cheaper”, making it a more efficient and scalable network.
The report highlights decentralized finance (DeFi), stablecoins, and payments as key areas where Solana can challenge Ethereum. Solana’s ability to transcend Ethereum in terms of speed and costs gives it an edge in the fast-growing sector.
“Another major use-case is lending and borrowing within the DeFi space, a sector expected to continue growing at a rapid pace. Payments and remittances also hold massive potential, especially with Solana’s lower fees and faster transaction times. If institutions and everyday users can save money through cheaper, faster transactions, Solana’s user base could grow even more rapidly”, VanEck stated.
The authors wonder why we haven’t yet witnessed a massive exodus toward Solana from Ethereum, particularly from institutions, despite these impressive SOL statistics.
In terms of institutional adoption, Solana trails behind its older rival, which won further validation in July this year when United States regulators gave the nod to nine spot Ethereum exchange-traded funds (ETFs). Although demand for these ETH instruments is rather lackluster, the approval indicates that institutional investors now have more appetite for ether.
The landscape around a U.S.-listed spot Solana ETF, remains in limbo. While other countries, like Brazil, have already greenlighted such products, BlackRock execs recently asserted that “it will be a while before we see” a SOL ETF in America.
Nonetheless, the VanEck analysts observed that retail investors are “slowly waking up” to Solana’s potential to challenge Ethereum’s status as the smart contracts king.
Is Solana An Undervalued Powerhouse?
VanEck further pointed out that Solana’s market cap remains only 22% of Ethereum’s. The report attributes this huge gap to Ether’s first-mover advantage and the wider institutional trust brought on by the ETFs.
However, the researchers believe these advantages won’t guarantee Ethereum’s reign forever. Solana should focus on its strengths to ultimately close this wide gap.
Meanwhile, the report suggested that Solana is grossly undervalued owing to its technical achievements and could potentially reach 50% of Ethereum’s market cap. Should this materialize, the price of SOL could rocket to $330, given ETH’s present price and market cap of $2,635 and $315 billion, respectively.