Solana’s present funding price sits at -0.0002%, signalling brief stress.
Solana DEX volumes fell behind Ethereum earlier this yr.
Accumulation of SOL suggests long-term investor confidence stays.
Customary Chartered has cautioned that Solana (SOL) might underperform Ethereum (ETH) resulting from fading meme coin exercise, a key driver of Solana’s on-chain quantity in latest quarters.
Whereas Solana has confirmed its technical capabilities, significantly through the latest meme coin buying and selling growth—the financial institution now sees a threat of underutilisation as seasonal developments shift.
In keeping with the financial institution’s Head of Digital Belongings Analysis, Geoff Kendrick, Ethereum’s broader adoption and institutional partnerships place it in a stronger place for sustained development.
Ethereum beneficial properties from broader use instances
Solana has usually been positioned as a sooner and cheaper various to Ethereum, with the power to deal with excessive transaction volumes at low price.
Nonetheless, Customary Chartered factors out that a lot of this exercise has been pushed by short-term buying and selling of meme cash, a sector identified for its volatility and restricted utility.
With meme coin enthusiasm cooling off in 2025, Kendrick initiatives a potential utilization hole for Solana earlier than different purposes, resembling decentralised finance platforms, gaming initiatives, or social media integrations, acquire important mass.
The financial institution says Ethereum’s benefit lies in its diversified person base, which incorporates enterprise-level purposes, monetary merchandise, and long-term sensible contract growth.
Blockchain analytics additionally helps this view. Earlier this yr, Ethereum overtook Solana in decentralised alternate (DEX) buying and selling volumes after a stoop in buying and selling on Raydium (RAY) and Pump.enjoyable, two of Solana’s most energetic meme coin platforms.
That shift underlined Ethereum’s dominance throughout a number of sub-sectors of the blockchain house.
Market sentiment displays short-term Solana dangers
Traders look like reacting to those alerts. In February, merchants started trimming publicity to Solana-based property resulting from uncertainty over the way forward for meme coin initiatives and delays in scaling up main Solana-native protocols.
Customary Chartered says these issues are actually being priced into market forecasts, significantly when it comes to income from transaction charges and new person onboarding.
One key indicator is Solana’s funding price. In keeping with blockchain information agency Glassnode, Solana presently has a adverse funding price of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A adverse funding price means brief sellers are paying charges to carry bearish positions, which generally signifies mounting downward stress on value.
Nonetheless, a adverse funding price can typically be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward value strikes pressure shorts to purchase again their positions, probably creating a pointy rally.
BeInCrypto stories that the buildup of SOL by institutional gamers in Might means that long-term traders should see worth in Solana, even when near-term efficiency lags Ethereum.
Analysts say Ethereum stays the dominant layer-1
Whereas Solana has demonstrated speedy development and sturdy technical infrastructure, analysts from IntoTheBlock imagine the community nonetheless has vital floor to cowl earlier than difficult Ethereum’s dominance.
The analysis group stated that though Solana might proceed to develop and goal area of interest purposes, surpassing Ethereum stays a long-term purpose slightly than an imminent milestone.
Ethereum’s integration with conventional finance, widespread developer assist, and upgrades just like the shift to proof-of-stake have helped entrench its place because the go-to blockchain for decentralised purposes.
Till Solana’s subsequent wave of real-world use instances beneficial properties momentum, Customary Chartered believes the community’s value and on-chain exercise might proceed to path Ethereum.
Because the market matures, each blockchains might discover house for development—however within the brief time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in response to the financial institution’s newest evaluation.
