Solana could reach 50% of Ethereum

According to a recent report by VanEck, Solana could potentially reach 50% of Ethereum’s market capitalization.

Furthermore, its price could reach over $300.

Solana vs. Ethereum: the analysis of VanEck

Currently, SOL, the native cryptocurrency of Solana, has a market capitalization of just over 70 billion dollars.

When it recorded the all-time high price, in November 2021, it was 78 billion, so not much higher than the current one. 

Moreover, that was not even the all-time high, as far as capitalization is concerned, because in March of this year, despite the price rise stopping well below the 2021 high, its capitalization for a brief moment even surpassed 86 billion. 

This is due to the fact that in the last three years the circulating supply has increased, given that the market capitalization is only a purely theoretical figure obtained by multiplying the price of an entire unit of the cryptocurrency by the total number of units in circulation. 

Currently, almost 469 million SOL have already been put into circulation, while its maximum supply is 585 million. 

Ethereum, however, for now, still remains unattainable from this point of view, given that it capitalizes more than 314 billion dollars.

However, if the price of SOL were to rise above $330, its market capitalization would reach half of the current one of ETH.

The growth of ETH and SOL

This reasoning takes as a reference the current market capitalization of Ethereum, but it is very likely that if there were a bull on the price of SOL there could also be one on ETH. 

It must be added, however, that not only does the circulating supply of ETH not increase, but it often even decreases. 

Since the partial burn of fees was introduced on Ethereum, when the fees are high the overall number of ETH burned exceeds that of the new ETH issued as a reward for staking, causing the circulating supply to actually decrease. 

Nonetheless, the reduction of the circulating supply of ETH is too small to significantly impact its market capitalization. Additionally, the increase in the circulating supply of SOL could partially reduce the growth potential of its price.

In any case, in order for the price of Solana to exceed $300, the trigger of a new altseason would still be necessary. 

VanEck in the crypto world 

VanEck is a company that deals with investments and financial products founded in 1955 in New York. 

For some years now, it has been very active in the crypto markets, so much so that it has issued spot ETFs in the USA on both Bitcoin and Ethereum. 

Although his analyses in this field cannot be considered entirely impartial, given his interest in promoting his crypto ETFs. It is still a company with more than 100 billion dollars in assets under management. A financial giant, even if not on the same level as BlackRock.

Over time, he has already had the opportunity to express himself often on the crypto market, such as when at the beginning of the month he predicted that the price of Bitcoin could even reach nearly 3 million dollars in about twenty or thirty years.

The research of VanEck: the comparison between Solana and Ethereum

The research on Solana and Ethereum was published on Market Vector by the analyst Martin Leinweber.

Leinweber states that Solana now boasts metrics that overshadow Ethereum in some areas, even though its institutional adoption has not yet eclipsed the world’s second cryptocurrency.

The analyst also cites the results of VanEck’s research according to which Solana has the potential to reach 50% of Ethereum’s market capitalization, with forecasts placing the price of SOL at exactly $330.

He says that such forecasts derive from technical models available on platforms like TradingView, and suggest a possible seismic shift in the cryptocurrency landscape if this increase in market capitalization were to occur.

Focus on DeFi and stablecoin, but also on institutional adoption and long-term investment strategies.

However, it suggests a more strategic approach compared to simply betting on a single platform, namely the creation of an index that includes the largest and most liquid smart contract platforms.

Such an approach would mitigate the uncertainty of choosing a single winner, and would also allow investors to benefit from the growth and evolution of the entire ecosystem based on smart contracts.

In fact, although in theory Solana could come to challenge Ethereum directly, it is also possible that both chains survive and thrive simultaneously. Furthermore, a potential increase in the price of SOL up to $330 would hardly occur without a similar increase in the price of ETH.