According to a report by Standard Chartered, Solana (SOL) is overpriced compared to Ethereum (ETH). A team led by Geoff Kendrick, the bank’s Head of Global Digital Asset Research, found metrics that support the argument that SOL is trading at an inflated price.
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One measure was the market capitalization to revenue from network fees ratio. The amount stood at 250 for Solana (SOL) and 121 for Ethereum (ETH). This ratio indicates that the price of SOL is more than twice that of ETH. The group also emphasizes how SOL’s supply is increasing at a 5.5% annual rate. Conversely, the supply of ETH is increasing at 0.5% annually.
The report also notes that the ETH network is home to most blockchain development. Around 38% of blockchain developers use the ETH network, while only 9% use the SOL network.
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Standard Chartered More Bullish On Ethereum Than Solana?
The latest report about SOL being overpriced is not the first time the bank has expressed bullishness towards Ethereum.
In a 2023 report, Standard Chartered said ETH could reach a price of $8,000 by 2026. Hitting $8,000 from current price levels will translate to a rally of about 228.6%. The bank also believes that the second-largest cryptocurrency by market cap will eventually hit $35,000. Kendrick stated in the report, “We see the $8,000 level as a stepping stone to our long-term ‘structural’ valuation estimate of $26,000-$35,000.“
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Despite the bullish outlook for Ethereum, Solana (SOL) has outperformed the cryptocurrency over the last two years. SOL’s price fell to sub-$10 levels in 2022 after the collapse of the FTX exchange. The asset has since made an incredible recovery, briefly surpassing the $200 mark earlier this year.
Standard Chartered also notes that a Trump victory in the US elections could lead to SOL outperforming ETH.
