Solana’s present funding charge sits at -0.0002%, signalling quick stress.
Solana DEX volumes fell behind Ethereum earlier this 12 months.
Accumulation of SOL suggests long-term investor confidence stays.
Commonplace Chartered has cautioned that Solana (SOL) may underperform Ethereum (ETH) resulting from fading meme coin exercise, a key driver of Solana’s on-chain quantity in current quarters.
Whereas Solana has confirmed its technical capabilities, notably through the current meme coin buying and selling growth—the financial institution now sees a threat of underutilisation as seasonal developments shift.
In accordance with the financial institution’s Head of Digital Property 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 circumstances
Solana has usually been positioned as a quicker and cheaper various to Ethereum, with the flexibility to deal with excessive transaction volumes at low value.
Nevertheless, Commonplace 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 tasks a potential utilization hole for Solana earlier than different functions, resembling decentralised finance platforms, gaming tasks, or social media integrations, achieve important mass.
The financial institution says Ethereum’s benefit lies in its diversified consumer base, which incorporates enterprise-level functions, monetary merchandise, and long-term good contract growth.
Blockchain analytics additionally helps this view. Earlier this 12 months, Ethereum overtook Solana in decentralised alternate (DEX) buying and selling volumes after a droop 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 area.
Market sentiment displays short-term Solana dangers
Traders seem 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 tasks and delays in scaling up main Solana-native protocols.
Commonplace Chartered says these considerations at the moment are being priced into market forecasts, notably when it comes to income from transaction charges and new consumer onboarding.
One key indicator is Solana’s funding charge. In accordance with blockchain knowledge agency Glassnode, Solana presently has a detrimental funding charge of -0.0002%, the one such determine among the many high 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A detrimental funding charge means quick sellers are paying charges to carry bearish positions, which generally signifies mounting downward stress on worth.
Nevertheless, a detrimental funding charge can generally be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward worth strikes pressure shorts to purchase again their positions, probably creating a pointy rally.
BeInCrypto experiences that the buildup of SOL by institutional gamers in Might means that long-term buyers should still see worth in Solana, even when near-term efficiency lags Ethereum.
Analysts say Ethereum stays the dominant layer-1
Whereas Solana has demonstrated fast development and strong technical infrastructure, analysts from IntoTheBlock consider the community nonetheless has important 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 functions, surpassing Ethereum stays a long-term objective relatively 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 functions.
Till Solana’s subsequent wave of real-world use circumstances beneficial properties momentum, Commonplace Chartered believes the community’s worth and on-chain exercise might proceed to path Ethereum.
Because the market matures, each blockchains might discover area for development—however within the quick time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in keeping with the financial institution’s newest evaluation.
