The market capitalization of programmable blockchain Solana’s sol (SOL) token could exceed that of rival Ethereum’s ether (ETH) during the next bullish cycle, one crypto observer said in December.
This week, the market has shown how Herculean the task would be: The ether price surged more than 19% on Monday, adding $70 billion to its market cap for a total of $439 billion, according to data source TradingView. That’s a gain equivalent to almost 90% of SOL’s market value in just one day.
The surge followed renewed hopes that a spot ether exchange-traded fund (ETF) will be approved in the U.S. Analysts say the gap between ether and its rivals like SOL will widen in the coming months as a potential spot ETF launch open the token to mainstream institutional adoption. So far, only bitcoin has had that privilege.
At press time, ether was the world’s second-largest digital asset, boasting a market cap of $453 billion, exceeded only by bitcoin’s (BTC) $1.38 trillion. Sol, meanwhile, ranked fifth with a market value of $82 billion.
“Near-term ETH outlook is incredibly bullish.Let’s not overcomplicate it,” Ilan Solot, co-head of digital assets at Marex Solutions, said in an email. “The ETF announcement is a near black swan even to (most) investors, markets dramatically short-to-underweight ETH, much of ETH liquidity is locked in staking, and the macro backdrop is favourable,”
Since its inception in 2015, Ethereum has been the world’s leading smart contract blockchain, powering over 4,000 decentralized applications. It’s home to some of the most critical decentralized finance protocols like Uniswap, AAVE and tokenization initiatives like BlackRock’s BUIDL. Moreover, Ethereum has never experienced a Solana-like outage.
Still, there have been instances, particularly during bull runs, when traders shifted to Solana to bypass Ethereum’s network congestion and higher transactions costs. For instance, Solana’s share in global trading volume on decentralized exchanges rose early this year thanks to the meme coin frenzy. That spurred talks of SOL eventually overtaking ETH.
If the ETH ETF speculation and recent price action is anything to go by, such talks appear premature.
Comments are closed.