- Standard Chartered’s report suggests that Solana is overvalued compared to Ethereum based on key metrics.
- The US election could impact the performance of Solana, Ethereum, and Bitcoin.
Solana (SOL) is predicted to lead in According to a recent report from Standard Chartered, the cryptocurrency market will outgrow Ethereum (ETH) and Bitcoin (BTC) by 2025. The British multinational bank predicts that Solana's value could rise fivefold, especially if Donald Trump wins the next US presidential election.
Jeffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered, announced new metrics for layer 1 blockchains focused on Solana and Ethereum. He compared Solana's current market cap to Ethereum on several historical metrics. Solana has a market cap to fee ratio of 250x, compared to Ethereum's 121x.
This high rating is based on market expectations. Solana's future growth potential, Kendrick expects to increase Solana's current throughput by 100 to 400 times over the next few years. He believes this growth potential is more likely to materialize under the Trump administration, given the president's friendly disposition towards digital assets.
Report comparing token supply and staking yield
Ethereum has been the dominant Layer 1 blockchain network for quite some time, but increased activity and rising Solana token prices raise questions about whether this network will soon dethrone Ethereum. I am. However, according to Standard Chartered, the price of SOL may be too high compared to Ethereum at the moment.
Additionally, Solana’s token supply grows at a rate of 5.5% per year, while Ethereum’s growth rate is 0.5% per year. This has a direct impact on the actual staking income, given Solana's yield of 1% and Ethereum's yield of 2.3%. Another advantage in favor of Ethereum is its availability to developers. 38% of blockchain developers are working on the Ethereum ecosystem, but only 9% are working on Solana.
Impact of US election on virtual currency regulation
The report also considers how U.S. regulatory policy may change after the election. That's likely to happen if former President Donald Trump wins. In that case, analysts predict a more positive environment for the crypto market, increasing the likelihood of approval for the spot-based Solana exchange-traded fund (ETF).
Based on this assumption, SOL could perform better than ETH and BTC. On the other hand, a new administration led by Kamala Harris could see tighter regulation, with Bitcoin leading the way, followed by Ethereum and Solana.
However, this is the opposite as Standard Chartered remains optimistic about cryptocurrencies in general.Consistent with the previous two predictions. The bank believes Ethereum could trade for $7,000 by the end of 2025 if Harris is president, and up to $10,000 if Trump is still in office. At the same time, Bitcoin is expected to soar to $200,000 by the end of the same year, regardless of the election outcome.
