Solana (SOL) has been making waves in the cryptocurrency world, with many observers believing it is poised to challenge Ethereum (ETH) as the dominant layer-1 network for blockchain applications. However, a recent report by Standard Chartered Bank suggests that SOL may be overvalued compared to ETH based on various metrics.
Led by Geoff Kendrick, the global head of digital assets research at Standard Chartered Bank, analysts predict that the performance of SOL, ETH, and Bitcoin (BTC) relative to each other will be heavily influenced by the outcome of the U.S. presidential election. If Donald Trump is re-elected, the analysts expect more favorable crypto regulations and a higher likelihood of approval for spot-based solana ETFs. On the other hand, a Kamala Harris-led administration could put pressure on smaller, riskier cryptocurrencies like SOL.
In a Trump administration, the team forecasts SOL to be the top performer among the three, followed by ETH and then BTC. However, under Harris, they predict the opposite, with BTC leading the pack, followed by ETH and SOL trailing behind.
Despite the election outcome, the analysts at Standard Chartered Bank remain bullish on the overall crypto market. They project that ETH could rally to $7,000 by the end of 2025 under Harris and $10,000 under Trump. Additionally, Bitcoin could potentially surge to $200,000 during the same period.
While SOL may appear overvalued compared to ETH, Kendrick points out that the market is pricing in a very optimistic growth future for Solana. The valuation metrics suggest that SOL would need to significantly increase its throughput to justify its current valuation. This would require SOL to establish dominance in key sectors such as finance, consumer applications, and decentralized physical infrastructure, as well as activate the Firedancer client for increased efficiency.
In conclusion, the competition between Solana, Ethereum, and Bitcoin will likely be influenced by the regulatory environment set by the next U.S. president. Despite SOL’s current overvaluation compared to ETH, the future success of Solana will depend on its ability to expand its market share and deliver on its growth expectations.