Solana’s present funding fee sits at -0.0002%, signalling quick stress.
Solana DEX volumes fell behind Ethereum earlier this 12 months.
Accumulation of SOL suggests long-term investor confidence stays.
Customary 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 current quarters.
Whereas Solana has confirmed its technical capabilities, significantly throughout the current meme coin buying and selling increase—the financial institution now sees a danger of underutilisation as seasonal developments shift.
In line 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 development.
Ethereum positive factors from broader use instances
Solana has typically 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 recognized for its volatility and restricted utility.
With meme coin enthusiasm cooling off in 2025, Kendrick tasks a attainable utilization hole for Solana earlier than different purposes, resembling decentralised finance platforms, gaming tasks, or social media integrations, acquire vital mass.
The financial institution says Ethereum’s benefit lies in its diversified consumer base, which incorporates enterprise-level purposes, monetary merchandise, and long-term sensible contract improvement.
Blockchain analytics additionally helps this view. Earlier this 12 months, 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 energetic meme coin platforms.
That shift underlined Ethereum’s dominance throughout a number of sub-sectors of the blockchain area.
Market sentiment displays short-term Solana dangers
Buyers seem like reacting to those alerts. 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.
Customary Chartered says these issues at the moment are being priced into market forecasts, significantly by way of income from transaction charges and new consumer onboarding.
One key indicator is Solana’s funding fee. In line with blockchain knowledge agency Glassnode, Solana presently has a detrimental funding fee of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A detrimental funding fee means quick sellers are paying charges to carry bearish positions, which usually signifies mounting downward stress on worth.
Nonetheless, a detrimental funding fee can typically be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward worth strikes power 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 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 fast development and sturdy technical infrastructure, analysts from IntoTheBlock imagine the community nonetheless has important 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 purposes, surpassing Ethereum stays a long-term aim fairly 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 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 could proceed to path Ethereum.
Because the market matures, each blockchains could discover area 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.
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