Markets
Ethereum Blockchain’s Ether (ETH) Token Nearly Adds an Entire Solana (SOL) to Its Market Cap
The market capitalization of Solana’s sol programmable blockchain (SUN) token may exceed that of rival ether Ethereum (ETH) during the next bull cycle, a crypto observer he said in December.
This week, the market showed how herculean the task would be: Ether’s price rose more than 19% on Monday, adding $70 billion to its market value for a total of $439 billion, according to the TradingView data source. It is a gain equivalent to almost 90% of SOL’s market value in just one day.
The wave followed renewed hopes that a spot ether exchange-traded fund (ETF) will be approved in the US Analysts say The gap between Ether and its rivals like SOL will widen in the coming months as a potential spot ETF launch opens the token to mainstream institutional adoption. Until now, only bitcoin has had this privilege.
At press time, ether was the second largest digital asset in the world, boasting a market value of US$453 billion, surpassed only by bitcoin. (BTC) US$1.38 trillion. Sol, in turn, came in fifth place, with a market value of US$82 billion.
“ETH’s near-term outlook is incredibly bullish. Let’s not overcomplicate it,” said Ilan Solot, co-head of digital assets at Marex Solutions, in an email. “The ETF announcement is almost a black swan even for (most) investors, markets are dramatically short to underweight ETH, much of ETH liquidity is locked up and the macro scenario is favorable,”
Since its creation in 2015, Ethereum has been the world’s leading smart contract blockchain, powering more than 4,000 decentralized applications. It is home to some of the most critical decentralized finance protocols such as Uniswap, AAVE and tokenization initiatives like BUILDING BlackRock. Furthermore, Ethereum has never experienced a Solana-like outage.
Still, there have been cases, especially during bull runs, where traders have switched to Solana to bypass Ethereum network congestion and higher transaction costs. For example, Solana’s share of global trading volume on decentralized exchanges increased earlier this year thanks to the meme coin frenzy. This has spurred talks about SOL eventually surpassing ETH.
If ETH ETF speculation and recent price action are anything to go by, such talks appear premature.