- Solana’s overreliance on memecoin trading may limit growth until broader applications mature over the next two to three years.
- Standard Chartered expects SOL to underperform Ethereum short-term, but forecasts a price of $500 by 2029.
- Solana’s valuation remains low relative to its network activity, signaling long-term potential despite near-term limitations.
Standard Chartered Bank has begun coverage on Solana, forecasting it will trail Ethereum over the next two to three years. The bank’s global head of digital assets research, Geoffrey Kendrick, explained that Solana’s present reliance on memecoin trading is unlikely to sustain long-term growth.
According to Kendrick, Solana’s trading activity is heavily skewed toward memecoins, thanks to its high throughput and low transaction costs. However, he noted that the memecoin sector appears to have peaked, leading to declining usage and limited new revenue opportunities.
Valuation remains low despite strong infrastructure
Kendrick noted that trades “cheap” on the market cap-to-GDP ratio, suggesting it is undervalued relative to its network activity. In contrast, BNB trades “rich” due to its tight integration with Binance. He added that while Solana’s infrastructure remains strong, its near-term GDP growth is expected to stay muted.
The report projected that although it is ready to serve the decentralized financial, social media, and infrastructure segments now, major adoption here is not likely until 2027. Work on projects begun last summer in the DeFi cycle is still ongoing and requires more time to grow.
Slow growth is expected before long-term recovery
Kendrick projects that Solana’s GDP will grow at a slower pace in the short term. As a result, SOL may continue to trade at a discount until new use cases gain momentum. He sees the ETH-SOL ratio rising from 15 to 17 by the end of 2027 before stabilizing.
Despite short-term challenges, Kendrick remains optimistic over the long term. He forecasts SOL reaching $275 by the end of 2025 and $500 by 2029. Ethereum is expected to outperform Solana in the interim, although Solana’s value could increase significantly once new sectors gain traction.
He also forecasted the other digital assets. Some others are Bitcoin going to $200,000 by 2025, XRP at $12.50, and Avalanche AVAX ending price to be $250 in 2029. By the end of 2028, he projects total stablecoin market capitalization could reach $2 trillion.
