Solana’s present funding fee sits at -0.0002%, signalling brief stress.
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) may underperform Ethereum (ETH) resulting from 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 tendencies shift.
In line with 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 progress.
Ethereum positive factors from broader use circumstances
Solana has usually been positioned as a quicker and cheaper different to Ethereum, with the flexibility to deal with excessive transaction volumes at low price.
Nevertheless, 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 tasks a doable utilization hole for Solana earlier than different functions, similar to decentralised finance platforms, gaming tasks, or social media integrations, acquire 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 sensible contract improvement.
Blockchain analytics additionally helps this view. Earlier this yr, Ethereum overtook Solana in decentralised change (DEX) buying and selling volumes after a hunch 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 look like reacting to those alerts. In February, merchants started trimming publicity to Solana-based property resulting from uncertainty over the way forward for meme coin tasks and delays in scaling up main Solana-native protocols.
Customary Chartered says these considerations at the moment are being priced into market forecasts, notably when it comes to income from transaction charges and new person onboarding.
One key indicator is Solana’s funding fee. In line with blockchain knowledge agency Glassnode, Solana presently has a unfavorable funding fee of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A unfavorable funding fee means brief sellers are paying charges to carry bearish positions, which usually signifies mounting downward stress on value.
Nevertheless, a unfavorable funding fee can typically be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward value strikes drive shorts to purchase again their positions, doubtlessly creating a pointy rally.
BeInCrypto reviews that the buildup of SOL by institutional gamers in Could means that long-term buyers should still see worth in Solana, even when near-term efficiency lags Ethereum.
Analysts say Ethereum stays the dominant layer-1
Whereas Solana has demonstrated fast progress 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 could proceed to develop and goal area of interest functions, surpassing Ethereum stays a long-term objective reasonably 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 functions.
Till Solana’s subsequent wave of real-world use circumstances positive factors momentum, Customary Chartered believes the community’s value and on-chain exercise could proceed to path Ethereum.
Because the market matures, each blockchains could discover house for progress—however within the brief time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in keeping with the financial institution’s newest evaluation.
