According to VanEck's September 25 report, Solana (SOL) could reach $330 and attain 50% of Ethereum's (ETH) current market capitalization, driven primarily by Solana's superior speed and transaction processing metrics.
Key Advantages of Solana
The report highlighted Solana's throughput, which can process thousands of transactions per second (TPS), which is 3,000% higher than Ethereum's TPS. Solana's daily active user count is 1,300% higher, and transaction fees are nearly 5 million percent cheaper compared to the Ethereum network.
Institutional Investor Lag
The report stated that retail investors are 'slowly waking up' to Solana's potential as a smart contract platform, while institutional investors have been slow to recognize its advantages. One possible reason for this lag could be the hesitancy to switch from well-established assets like ETH to the relatively newer Solana.
Factors Suppressing Ethereum's Price
Earlier in September 2024, VanEck released a report outlining the factors suppressing Ethereum's price. The primary reason for Ethereum's poor price performance is the value extraction from Ethereum layer-2 networks. The rapid growth of these projects and the massive reduction in transaction fees have led to a collapse of Ethereum layer-1 revenues by 99% since March 2024.
VanEck's report highlights the significant advantages of Solana in terms of speed and efficiency, as well as the key challenges faced by Ethereum. These factors could substantially impact future price dynamics in the cryptocurrency market.
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