As 2025 approaches, market experts are talking a lot about the competition between Ethereum and Solana. Both cryptocurrencies have seen meteoric growth in 2024, but prospects vary as to which will ultimately prevail in the altcoin industry in the coming year.
Solana’s rapid rise
Solana’s outstanding numbers have sparked interest. It outperformed Ethereum in several important metrics in December, including app revenue and decentralized exchange (DEX) volume: Solana generated approximately $141 million in app revenue; Ethereum gained $93.56 million.
Additionally, Solana’s decentralized trading volume reached an impressive $67.43 billion, compared to Ethereum’s $52.37 billion. This development has prompted several experts to predict that Solana could overtake Ethereum as the preeminent cryptocurrency by 2025.
Analysts attribute Solana’s success to its fast transaction speeds and minimal costs, making it particularly attractive for decentralized finance (DeFi) applications and non-fungible tokens (NFTs). The upcoming Firedancer upgrade is expected to improve Solana’s network performance, potentially solidifying its pioneering status in the DeFi sector.
Will Ethereum Overtake Solana?
While Solana’s stats are great, Matt Hougan, CIO of Bitwise, notes the rapid development of Ethereum’s ecosystem and projects that will allow it to surpass Solana by 2025. He highlights how layer 2 solutions such that Base, Optimism, and Arbitrum contribute to the scalability of Ethereum, bridging the gap between institutional trust and everyday access.
The mental model of Ethereum is outdated. The common consensus is that Solana is cheap/easy/fun and Ethereum is slow/unwieldy/expensive.
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Hougan highlights Ethereum’s growing competitiveness with Solana’s user-friendly appeal, negating its outdated reputation for slowness and cost. He also discusses the success of initiatives like Clanker and Virtuals on the Ethereum Base network, proving their ability to encourage creativity while maintaining solid infrastructure. The institutional appeal of Ethereum
Conversely, Ethereum remained active. It recently attracted more than $850 million in institutional capital inflows to exchange-traded funds (ETFs), demonstrating its enduring appeal to investors. Anticipation of Ethereum’s Petra upgrade is building excitement, promising substantial improvements in overall speed and performance.
The price of Ethereum is also expected to increase. Depending on increased ETF sponsorships and institutional interest, some analysts estimate its value could reach $6,000 to $7,000 by 2025.
A competitive environment
Both cryptocurrencies have particular strengths and flaws as they approach 2025. According to Hougan, Ethereum is more likely to succeed in the future given the explosive increase in transaction volume and user interaction . Yet one cannot ignore Solana’s institutional support and formidable ecosystem.
Featured image of DALL-E, chart by TradingView
