Solana’s present funding fee 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.
Customary Chartered has cautioned that Solana (SOL) might underperform Ethereum (ETH) because of fading meme coin exercise, a key driver of Solana’s on-chain quantity in current quarters.
Whereas Solana has confirmed its technical capabilities, notably throughout the current meme coin buying and selling growth—the financial institution now sees a danger of underutilisation as seasonal tendencies shift.
In response to 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 positive factors 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 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 attainable utilization hole for Solana earlier than different purposes, corresponding to decentralised finance platforms, gaming initiatives, or social media integrations, acquire vital 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 droop in buying and selling on Raydium (RAY) and Pump.enjoyable, two of Solana’s most lively 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 belongings because of uncertainty over the way forward for meme coin initiatives and delays in scaling up main Solana-native protocols.
Customary Chartered says these considerations are actually being priced into market forecasts, notably by way of income from transaction charges and new person onboarding.
One key indicator is Solana’s funding fee. In response to blockchain knowledge agency Glassnode, Solana presently has a damaging funding fee of -0.0002%, the one such determine among the many high 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A damaging funding fee means quick sellers are paying charges to carry bearish positions, which generally signifies mounting downward strain on worth.
Nonetheless, a damaging funding fee can generally be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward worth strikes drive shorts to purchase again their positions, probably creating a pointy rally.
BeInCrypto reviews that the buildup of SOL by institutional gamers in Could 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 fast development and strong technical infrastructure, analysts from IntoTheBlock consider 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 objective somewhat 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 positive factors momentum, Customary Chartered believes the community’s worth and on-chain exercise might proceed to path Ethereum.
Because the market matures, each blockchains might discover house for development—however within the quick time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in line with the financial institution’s newest evaluation.
