Solana Price to Lag Ethereum's While Network Addresses Scaling Issues: Standard Chartered

Solana's Price Outlook: Underperforming Ethereum in the Near Future

According to a report by international banking group Standard Chartered, Solana's price is likely to underperform rival Ethereum over the next two to three years due to scaling issues that currently limit the blockchain's wider application beyond its current meme coin focus.

The report, initiated by Standard Chartered's Head of Digital Assets Geoffrey Kendrick, forecasts that the Solana-Ethereum price ratio is likely to rise from its current level of 14 to 17 through 2028 before dipping again in 2029. This means one SOL token would trade at a significantly lower amount compared to its Layer-1 blockchain competitor, Ethereum.

Kendrick expects Solana to hit $275 by the end of this year and $500 by the close of 2029, while Ethereum is forecast to reach $4,000 in 2022 and $7,500 in 2029. The analyst believes Solana's dominance in high-volume, low-cost transaction areas like meme coin trading may be limited as the network struggles to scale.

"Beyond meme coin trading, Solana should dominate future sectors with high transaction volumes, low costs and fast transaction times as they develop–particularly high-throughput financial apps and traditional consumer apps like social media," Kendrick wrote. "However, achieving scale in these areas may be some years away."

The report comes as Solana has been unable to keep pace with Ethereum's recent surge, which has been bolstered by the Pectra upgrade that improved security, efficiency, and increased staking capacity.

More Crypto ETFs on the Horizon

In a separate note, Standard Chartered's digital assets researcher stated that Solana and XRP are expected to soon get their own exchange-traded funds (ETFs). This follows the U.S. SEC's approval of eight spot Ethereum ETFs, allowing traditional investors to buy shares tracking the second-largest digital asset's price.