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) as a consequence of fading meme coin exercise, a key driver of Solana’s on-chain quantity in latest quarters.
Whereas Solana has confirmed its technical capabilities, notably throughout the latest meme coin buying and selling increase—the financial institution now sees a danger of underutilisation as seasonal developments shift.
In accordance with the financial institution’s Head of Digital Belongings Analysis, Geoff Kendrick, Ethereum’s broader adoption and institutional partnerships place it in a stronger place for sustained progress.
Ethereum positive factors from broader use circumstances
Solana has usually been positioned as a quicker and cheaper different to Ethereum, with the power to deal with excessive transaction volumes at low value.
Nonetheless, 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 tasks a doable utilization hole for Solana earlier than different functions, akin to decentralised finance platforms, gaming tasks, or social media integrations, achieve crucial mass.
The financial institution says Ethereum’s benefit lies in its diversified person 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 trade (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
Buyers look like reacting to those indicators. In February, merchants started trimming publicity to Solana-based belongings as a consequence of uncertainty over the way forward for meme coin tasks and delays in scaling up main Solana-native protocols.
Normal Chartered says these considerations at the moment are being priced into market forecasts, notably by way of income from transaction charges and new person onboarding.
One key indicator is Solana’s funding charge. In accordance with blockchain knowledge agency Glassnode, Solana at present has a adverse funding charge of -0.0002%, the one such determine among the many high 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A adverse funding charge means quick sellers are paying charges to carry bearish positions, which usually signifies mounting downward strain on worth.
Nonetheless, a adverse 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 stories 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 speedy progress and strong technical infrastructure, analysts from IntoTheBlock imagine the community nonetheless has vital floor to cowl earlier than difficult Ethereum’s dominance.
The analysis group stated that though Solana could proceed to develop and goal area of interest functions, surpassing Ethereum stays a long-term objective moderately 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 circumstances positive factors momentum, Normal Chartered believes the community’s worth and on-chain exercise could proceed to path Ethereum.
Because the market matures, each blockchains could discover house for progress—however within the quick time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in accordance with the financial institution’s newest evaluation.
