According to a recent report by VanEck’s subsidiary, Market Vector, Solana has the potential to reach 50% of Ethereum’s market cap.
Over 3,000% more transactions are processed on the Solana network than on Ethereum, and there are over 1,300% more daily active users. At the same time, Solana’s transaction fees are also considerably cheaper.
Yet, the question remains. Why haven’t institutions migrated towards Solana? The new report by VanEck’s subsidiary mentions that Solana is currently undervalued. It said that Solana is inherently superior while its market cap is just 22% of Ethereum.
Third-party research revealed that Solana can reach 50% of Ether’s market cap. If that happens, Solana may end up being priced at $300 per token.
Another June report outlined Solana as one of the big three besides Ethereum and Bitcoin. The report hinted at the probability of Solana having the next ETFs, with some asset managers filing for Solana ETFs with the U.S. SEC.
Solana receives notable institutional adoption
According to the report, institutional investors have been adopting Solana underwhelmingly. That is despite retail investors realizing and appreciating its advantages over other blockchains.
The report owed the gap in adoption to Ethereum’s early entry into the market in 2014 compared to Solana, which launched in 2018. The gap reportedly contributes to better familiarity formed between institutional investors and the blockchain.
Institutional investors were also reportedly cautious about rotating large portions of their investments from more established cryptocurrencies such as Ether. Avoiding the rotation likewise leads them to miss out on opportunities offered by undervalued assets such as Solana.
The report noted that it was dangerous for market participants not to account for possible market changes, including sudden downturns or the entrance of new competitors. According to the report, investors should be intuitive when holding on to assets in the fast-changing crypto world.
Solana has still shown significant adoption by institutional investors this year, as indicated by multiple announcements made during the Solana Breakpoint event held in Singapore this September. The fourth largest bank in the U.S., Citibank, and the asset management company Franklin Templeton announced their plans to integrate Solana into their financial services.
Additional reporting by Noor Bazmi
