• SOL was undervalued against ETH despite superior metrics.  
• SOL could reach 50% of the ETH market cap and hit $330. 

According to VanEck’s MarketVector, Solana [SOL] was grossly undervalued relative to Ethereum [ETH], but the former could attempt a strong catch-up.

Martin Leinweber, director of digital assets research at MarketVector, projected that SOL could reach half ETH’s market size. 

“Solana has the potential to reach 50% of Ethereum’s market cap, with predictions placing SOL at a price of USD 330.” 

SOL vs ETH

Leinweber believed that given Solana’s superior performance on key metrics compared to ETH; it could soon close the gap between their market caps.

For perspective,  Solana has become highly scalable, faster, and cheaper than ETH. Part of the report read, 

“Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and its transaction fees are nearly 5 million percent cheaper.” 

However, the executive noted that despite the remarkable fundamentals, SOL remained massively undervalued from a market cap perspective. 

“Despite Solana’s superior performance in several key metrics, its market cap remains at just 22% of Ethereum’s. Solana continues to outperform in transaction volume and user engagement, yet its value in the market lags significantly.” 

At press time, ETH’s market cap was $314 billion, while SOL’s was $70 billion, according to CoinMarketCap data. Assuming ETH’s size stagnates, SOL’s market cap should grow above $150 billion (>2x) to capture half of ETH’s share. 

The bullish outlook for SOL on the price front was also evident in the SOL/ETH ratio.

The ratio tracks SOL’s value relative to ETH and has jumped from 0.01 in early 2024 to near its ATH of 0.05. The ratio was close to hitting price discovery, which could set SOL’s value to new highs. 

However, according to Leinweber, more institutional players will be needed to drive growth and boost the SOL’s value. 

If SOL ETF approvals happen, crypto trading and liquidity provider GSR shared the same bullish outlook in July. Although Brazil has approved an SOL ETF, there was still regulatory uncertainty in the US. 

Nevertheless, GSR projected SOL could rally 3.4x or 8.9x in base and bullish scenarios, respectively, if the U.S. approves ETFs for the asset.  

In the meantime, SOL’s price was consolidating around $150 at the time of writing. It was up nearly 15% from its $128 support but must clear the $160 hurdle to advance.