Solana’s present funding charge sits at -0.0002%, signalling quick strain.
Solana DEX volumes fell behind Ethereum earlier this yr.
Accumulation of SOL suggests long-term investor confidence stays.
Normal Chartered has cautioned that Solana (SOL) might underperform Ethereum (ETH) attributable to fading meme coin exercise, a key driver of Solana’s on-chain quantity in latest quarters.
Whereas Solana has confirmed its technical capabilities, significantly in the course of the latest meme coin buying and selling increase—the financial institution now sees a danger of underutilisation as seasonal tendencies shift.
In keeping 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 instances
Solana has usually been positioned as a sooner and cheaper different to Ethereum, with the flexibility to deal with excessive transaction volumes at low value.
Nevertheless, Normal 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 attainable utilization hole for Solana earlier than different functions, comparable to decentralised finance platforms, gaming initiatives, or social media integrations, acquire 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 improvement.
Blockchain analytics additionally helps this view. Earlier this yr, Ethereum overtook Solana in decentralised alternate (DEX) buying and selling volumes after a hunch 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 seem like reacting to those alerts. In February, merchants started trimming publicity to Solana-based property attributable to uncertainty over the way forward for meme coin initiatives and delays in scaling up main Solana-native protocols.
Normal Chartered says these considerations are actually being priced into market forecasts, significantly when it comes to income from transaction charges and new consumer onboarding.
One key indicator is Solana’s funding charge. In keeping with blockchain information agency Glassnode, Solana at present has a destructive funding charge of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A destructive funding charge means quick sellers are paying charges to carry bearish positions, which usually signifies mounting downward strain on value.
Nevertheless, a destructive funding charge can typically be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward value strikes drive shorts to purchase again their positions, probably creating a pointy rally.
BeInCrypto reviews that the buildup of SOL by institutional gamers in Might means that long-term buyers 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 consider the community nonetheless has vital floor to cowl earlier than difficult Ethereum’s dominance.
The analysis group mentioned that though Solana could proceed to develop and goal area of interest functions, surpassing Ethereum stays a long-term objective quite than an imminent milestone.
Ethereum’s integration with conventional finance, widespread developer help, 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 instances beneficial properties momentum, Normal Chartered believes the community’s value and on-chain exercise could proceed to path Ethereum.
Because the market matures, each blockchains could discover house for development—however within the quick time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in response to the financial institution’s newest evaluation.
