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As a card-carrying member of the “nothing ever happens” club, many of my thoughts on whether or not news has been priced-in can be summarized by this classic Reddit post.
Nevertheless, one of my guests on the Lightpeed podcast this week explained why ETH has been slowly gaining ground on solana — and why he believes that trend may continue.
I hosted Geoff Kendrick, the head of digital assets research at Standard Chartered, to explain his Solana thesis. Standard Chartered is a relatively large global bank based out of the UK. This Solana report was the bank’s first, in what may be a show of Solana’s growing relevance to institutional investors.
The report is bullish on SOL, offering a price target of $275 by year’s end and a target of $500 by the end 2029, but it predicts that ETH will outperform SOL in the short to medium term. I found this surprising given how bad the vibes surrounding ETH have been in recent months — and how mostly positive things have been in Solana land.
SOL consistently leads ETH in real economic value (a Blockworks Research metric for the tips and fees that measure demand to land transactions on a blockchain) despite Solana having a quarter of Ethereum’s market cap. ETH’s big headwind is its L2s, which have helped the blockchain scale but may be damaging to ETH’s ability to accrue value since they take on a lot of trading volume, but pay relatively little in fees to Ethereum. Geoff believes the bad vibes surrounding ETH are already “priced in.”
“There was a lot of debate in 2024 about, ‘Do [L2s] add or subtract value?’” Kendrick said. “So, let’s say that a lot of that story has already played out in a relative sense.” He later added: “For Solana, you came off massive multi-year lows post-FTX, had a comeback in 2023 thanks to memecoin activity, but now that memecoin trading is post-peak, Solana may underperform Ethereum in the near term.”
Kendrick argued that the market trades Solana at a discount relative to its economic activity from memecoins because it views memecoin trading as unsustainable. I would note that memecoin activity has proven more sticky than many might have predicted — pump.fun generated $50 million in revenue last month, despite a dip in usage — but we’ll have to see how all of this plays out over time.
Kendrick’s thesis has been correct over the past month, at least. The ratio of SOL’s price to ETH’s price is down nearly 15%.
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