- Solana’s present funding price sits at -0.0002%, signalling quick stress.
- Solana DEX volumes fell behind Ethereum earlier this yr.
- Accumulation of SOL suggests long-term investor confidence stays.
Standard Chartered has cautioned that Solana (SOL) could underperform Ethereum (ETH) resulting from fading meme coin activity, a key driver of Solana’s on-chain quantity in latest quarters.
While Solana has confirmed its technical capabilities, significantly through the latest meme coin buying and selling growth—the financial institution now sees a threat of underutilisation as seasonal tendencies shift.
According to the financial institution’s Head of Digital Assets Research, Geoff Kendrick, Ethereum’s broader adoption and institutional partnerships place it in a stronger place for sustained progress.
Ethereum good points from broader use instances
Solana has usually been positioned as a quicker and cheaper various to Ethereum, with the power to deal with excessive transaction volumes at low price.
However, Standard Chartered factors out that a lot of this activity has been pushed by short-term buying and selling of meme cash, a sector identified for its volatility and restricted utility.
With meme coin enthusiasm cooling off in 2025, Kendrick initiatives a attainable utilization hole for Solana earlier than different purposes, such as decentralised finance platforms, gaming initiatives, or social media integrations, achieve crucial mass.
The financial institution says Ethereum’s benefit lies in its diversified consumer base, which incorporates enterprise-level purposes, monetary merchandise, and long-term good contract growth.
Blockchain analytics additionally helps this view. Earlier this yr, Ethereum overtook Solana in decentralised change (DEX) buying and selling volumes after a stoop in buying and selling on Raydium (RAY) and Pump.enjoyable, two of Solana’s most lively meme coin platforms.
That shift underlined Ethereum’s dominance throughout a number of sub-sectors of the blockchain area.
Market sentiment displays short-term Solana dangers
Investors seem like reacting to those alerts. In February, merchants started trimming publicity to Solana-based belongings resulting from uncertainty over the way forward for meme coin initiatives and delays in scaling up main Solana-native protocols.
Standard Chartered says these issues are actually being priced into market forecasts, significantly when it comes to income from transaction charges and new consumer onboarding.
One key indicator is Solana’s funding price. According to blockchain information agency Glassnode, Solana at the moment has a adverse funding price of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A adverse funding price means quick sellers are paying charges to carry bearish positions, which usually signifies mounting downward stress on value.
However, a adverse funding price can typically be a contrarian indicator. Traders could also be anticipating a brief squeeze, the place sudden upward value strikes pressure shorts to purchase again their positions, probably creating a pointy rally.
BeInCrypto experiences that the buildup of SOL by institutional gamers in May means that long-term traders should see worth in Solana, even when near-term efficiency lags Ethereum.
Analysts say Ethereum stays the dominant layer-1
While Solana has demonstrated fast progress and strong technical infrastructure, analysts from IntoTheBlock consider the community nonetheless has vital floor to cowl earlier than difficult Ethereum’s dominance.
The analysis group stated that though Solana might proceed to develop and goal area of interest purposes, surpassing Ethereum stays a long-term objective slightly than an imminent milestone.
Ethereum’s integration with conventional finance, widespread developer assist, and upgrades just like the shift to proof-of-stake have helped entrench its place as the go-to blockchain for decentralised purposes.
Until Solana’s subsequent wave of real-world use instances good points momentum, Standard Chartered believes the community’s value and on-chain activity might proceed to path Ethereum.
As the market matures, each blockchains might discover area for progress—however within the quick time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in keeping with the financial institution’s newest evaluation.
