VanEck Research Predicts Solana Could Soar to $330, Attaining 50% of Ethereum’s Market Cap

A report released on September 25 by VanEck suggests that Solana could reach a price of $330 and grow to capture 50% of Ethereum’s current market capitalization. This growth is largely attributed to Solana’s superior speed and transaction processing capabilities.

The report highlights Solana’s impressive throughput, handling thousands of transactions per second (TPS), a rate that’s 3,000% higher than Ethereum’s. Additionally, Solana boasts a daily active user count that exceeds Ethereum’s by 1,300%, while its transaction fees are almost 5 million percent lower.

Thanks to its speed and cost-effectiveness, Solana is seen as having a significant advantage over Ethereum, particularly in the areas of payments and remittances. The authors of the report emphasize that stablecoins could greatly benefit from Solana’s efficiency, potentially driving a surge in decentralized finance (DeFi) activity due to the cost savings passed on to users.

The report notes that retail investors are “slowly waking up” to Solana’s potential to compete with Ethereum as a smart contract platform. However, it also points out that institutional investors seem hesitant to recognize Solana’s benefits, possibly due to their preference for established assets like Ethereum.

VanEck analyzes Ethereum’s recent price challenges

Earlier in September 2024, VanEck published another report that examined the factors behind Ethereum’s stagnant price performance. The analysis suggests that the primary reason for this downturn is value extraction by Ethereum’s layer-2 networks.

Following the Dencun upgrade in March 2024, Ethereum saw an explosion in layer-2 scaling solutions, which dramatically reduced transaction fees for these networks. As a result, Ethereum’s layer-1 revenue plummeted by 99% since March 2024. However, the network fees showed signs of recovery later in September 2024.

VanEck also pointed to the user migration to faster layer-1 networks like Solana and Sui (SUI) as another key factor affecting Ethereum’s price and transaction revenue. Although Ethereum still enjoys a first-mover advantage, the report warns that this edge is rapidly diminishing.

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