Reporter
Posted:
- SOL is currently undervalued when compared to ETH, despite stronger metrics.
- SOL has the potential to capture 50% of the ETH market cap and reach $330.
As per VanEck’s MarketVector, Solana [SOL] is significantly undervalued against Ethereum [ETH], indicating that SOL may stage a robust comeback.
Martin Leinweber, head of digital assets research at MarketVector, estimates that SOL could attain half of ETH’s market cap size.
“Solana could reach 50% of Ethereum’s market cap, with forecasts suggesting SOL may price around USD 330.”
SOL compared to ETH
Leinweber believes that, given Solana’s superior performance in critical metrics in comparison to ETH, it could reduce the market cap disparity soon.
For reference, Solana has proven to be highly scalable, faster, and more affordable than ETH. Portions of the report noted,
“Solana processes 3,000% more transactions than Ethereum, boasts 1,300% more daily active users, and its transaction fees are cheaper by nearly 5 million percent.”
Nonetheless, the executive highlighted that even with positive fundamentals, SOL’s market cap is still significantly undervalued.
“Despite Solana’s outstanding performance in several crucial metrics, its market cap is only 22% of Ethereum’s. Solana consistently outperforms in transaction volume and user participation, yet its market value remains markedly behind.”
As of now, the market cap for ETH was $314 billion, while SOL stood at $70 billion, according to CoinMarketCap data. If ETH’s size doesn’t fluctuate, SOL needs to exceed a market cap of $150 billion (greater than 2x) to attain half of ETH’s share.
The optimistic outlook for SOL in terms of pricing is also reflected in the SOL/ETH ratio.
This ratio monitors SOL’s worth in relation to ETH and has surged from 0.01 in early 2024 to nearly its all-time high of 0.05. The ratio is approaching a price discovery phase, which could propel SOL’s value to unprecedented heights.
Source: SOL/ETH, TradingView
Nevertheless, Leinweber asserts that increased participation from institutional investors is essential to stimulate growth and enhance SOL’s value.
Should there be approvals for SOL ETFs, crypto trading and liquidity provider GSR echoed this bullish perspective in July. While Brazil has sanctioned a SOL ETF, regulatory uncertainties persist in the United States.
Nonetheless, GSR projected SOL could surge by 3.4x or 8.9x in baseline and optimistic scenarios, respectively, if the U.S. approves ETFs for the asset.
Source: GSR
Currently, SOL’s price is stabilizing around $150 as of this writing. It has risen nearly 15% from its $128 support but needs to surpass the $160 barrier to proceed further.
Source: SOL/USDT, TradingView
