SOL/ETH ratio has hit a new all-time high: Could Solana surpass Ethereum?

SOL/ETH ratio surged past 0.066 yesterday, setting a new all-time high. The growing momentum around Solana has sparked increasing expectations that it might eventually surpass Ethereum in performance.

As of today, SOL/ETH ratio has risen by 3.5%, surpassing its previous high of 0.06450 recorded in August. This rise has fueled discussions about Solana’s potential to outpace Ethereum, given its recent developments and ecosystem growth. According to the chart, the current ratio stands at 0.06964, reflecting this strong upward trend in the market.

The recent surge in the SOL/ETH ratio can be attributed to the contrasting levels of network activity between Ethereum and Solana. While Ethereum’s network activity has stagnated, Solana’s has been consistently increasing. For instance, according to data from DeFi Llama, the trading volume on Solana’s decentralized exchanges (DEXs) has surpassed $2 billion per day for four consecutive days and continues to grow.

In contrast, Ethereum’s DEX trading volume has remained flat over the past few months, fluctuating between $1 billion and $2 billion. This trend is further evident when comparing the Total Value Locked (TVL) on both networks.

According to DeFi Llama statistics, Solana’s TVL has surged above $6.4 billion, its highest since early 2022, indicating a clear upward trend. Meanwhile, Ethereum’s TVL has drastically declined to around $48 billion, down from $65 billion at the start of the year.

Solana’s faster transaction speeds and significantly lower fees compared to Ethereum have made it a popular choice among meme coin traders. Notable Solana-based meme coins such as DOGEWIF, BONK, and POPCAT have gained considerable popularity in 2024. Solana’s market share in sectors like DeFi and GameFi is also steadily expanding.

So, how high can SOL/ETH ratio go?

If Solana continues to attract as much attention from traders as it does now, SOL/ETH ratio could rise significantly. Solana’s current market capitalization is slightly over $81.6 billion, while Ethereum’s stands at $307.1 billion. If Solana catches up to Ethereum’s market cap, the SOL/ETH ratio could increase nearly fourfold, potentially reaching the 0.20 range.

One factor that could help Ethereum remain competitive with Solana is the anticipated launch of the spot Ethereum ETF in 2024, which may attract increased institutional investment. However, so far, the Ethereum ETF has not performed well, with net capital outflows nearing $500 million.

The demand for the #Ethereum ETF is so bad that Farside took down the Cumulative Flow chart. It’s been negative since inception. I bet the Ethereum Foundation made them take it down pic.twitter.com/WOE9xzOFfN

— MAC ₿ (@MacB10101) October 22, 2024

Whether institutional interest in Ethereum returns remains to be seen, but if it doesn’t, the SOL/ETH ratio may rise significantly in 2024.

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Margharet Tess

Editor, Developer at Cryptheory Labs

I have been active in the cryptocurrency world for over 6 years, during which I have written countless articles about this sector. What fascinates me most about cryptocurrencies is their technological aspect and the problems they aim to solve. In the past three years, I have ventured into app development and am currently working on a larger project called P2E Buzzer. Stay tuned for the surprise. 🙂 My previous experiences: Business2Community.com, TradingPlatforms.com

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