A recent cryptocurrency report published by VanEck claims that the performance of SOL, Solana’s native cryptocurrency, could outperform ETH (Ethereum) in the coming years.
However, this is not a precise prediction, but rather assumptions about more or less good scenarios within which the price could move.
VanEck’s proposed scenarios for the Ethereum and Solana cryptocurrencies
VanEck’s predictions relate to the performance of the SOL price over the next ten years.
They are therefore low-probability forecasts, consisting of an extremely wide range of possibilities.
The current price of Solana’s native cryptocurrency is around $36, having also fallen below $10 in December last year.
The worst-case scenario suggested by VanEck is that the price will fall below $10 in the next few years (9.8).
However, as this is one of the two extremes of a very wide range, it should only be taken as a reference point.
In fact, the best case scenario would be to exceed $3,200, i.e. an increase of 10,000% from current levels.
Taking an intermediate figure, we can say that VanEck sees the possibility of the SOL price rising above $1,500, but with a good chance of ending up well above or well below this figure.
Solana’s past
It should be noted that SOL debuted on the crypto markets in 2020 at under $0.6 and peaked at over $260 in November 2021. So from the time of its listing to its all-time high, the gains were over 40,000%.
Typically, these incredible performances are very difficult to repeat, so a +10,000% from current values seems unlikely, although theoretically possible.
However, taking the highs from $260 to $3,200 as a reference, the gain would be +1.100%, which is not at all absurd in the crypto markets in the long term.
Moreover, the price of SOL seems to be well suited to the inflation of real speculative bubbles, such as the 2021 one. Suffice it to say that in July 2021, after the first big spike in early 2021, the price was below $30 and in less than four months it went up an incredible +1,000%. Within the next seven months, it went back to where it started, with the speculative bubble having completely deflated by then.
The starting price of $0.6 is probably of little use and not worth using as a reference point. Perhaps a better reference point would be the $9.8 reached in December 2020, which is probably not coincidentally the bottom identified by VanEck.
The other reference point could be $30, as the price of Solana has indeed been hovering around this level since June 2022, if we exclude the bracket below $10 opened by the FTX bankruptcy in November 2022 and closed already in January 2023.
The Solana boom
In fact, VanEck is predicting a real boom in the use of SOL.
According to the report published yesterday, Solana could become the first blockchain to host an application with more than 100 million users. This hypothetical achievement would be a tipping point for the adoption and value of SOL, leading to a huge increase in value.
Another hypothesis is that Solana could reach a market share of just under half that of Ethereum, partly because it proposes a different model.
While Ethereum relies heavily on decentralisation and community governance, Solana has a more pragmatic approach dedicated to scalability and speed, which could end up attracting a different type of user and developer less interested in decentralisation.
Cryptocurrencies: the comparison between Ethereum and Solana
VanEck’s idea is therefore not a direct competition between Solana and Ethereum, but rather a different approach aimed at different types of users.
Comparisons can only be made on price changes over time, while on a practical level these two things would not be directly comparable.
On the other hand, the price of ETH has already experienced two huge bull runs, the one in 2017 that took it from $10 to $1,200, and then the one in 2021 that took it from $600 to almost $4,900.
At this point, it is possible to imagine that the price of SOL could also go through another similar bull run, although it should be noted that, using historical highs as a reference, Ethereum’s second bull run resulted in a x4 from the previous highs.
Should the next bull run also lead to a x4 in the SOL price, the new high could be around $1,000.
Finally, it should be mentioned that VanEck also offers an ETN on the SOL among its derivatives products.
Source: https://en.cryptonomist.ch/2023/10/31/cryptocurrencies-solana-outperform-ethereum/