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As 2025 approaches, market experts are talking a lot about the extent to which Ethereum and Solana compete with each other. Both cryptocurrencies have grown by leaps and bounds in 2024, but despite this, perspectives vary on what will ultimately prevail in the altcoin industry in the coming year.
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Solana’s meteoric rise
Solana’s outstanding figures have attracted interest. It outperformed Ethereum in several key benchmarks in December, including application revenue and decentralized exchange (DEX) volume: Solana brought in about $141 million in application revenue; Ethereum earned $93.56 million.
Furthermore, Solana’s decentralized exchange volume reached an impressive $67.43 billion, as opposed to Ethereum’s $52.37 billion. This development has prompted several experts to predict that Solana could surpass Ethereum as the preeminent cryptocurrency by 2025.
Analysts attribute Solana’s success to its fast transaction speeds and minimal fees, making it especially attractive for decentralized finance (DeFi) applications and non-fungible tokens (NFTs). The upcoming Firedancer upgrade is expected to improve Solana’s network performance, potentially cementing its status as a pioneer in the DeFi sector.
Will Ethereum Overtake Solana?
While Solana’s metrics are excellent, Bitwise CIO Matt Hougan notes the rapid development of Ethereum’s ecosystem and projects that will allow it to surpass Solana by 2025. He emphasizes how Layer 2 solutions such as Base, Optimism and Arbitrum help the scalability of Ethereum, bridging the gap between institutional trust and everyday access.
People’s mental model of Ethereum is outdated. The general consensus is that Solana is cheap/easy/fun and Ethereum is slow/clunky/expensive.
But look what’s happening in the AI agent space. Some of the most exciting ‘fun’ projects, like Clanker and Virtuals, take place…
— Matt Hougan (@Matt_Hougan) December 18, 2024
Hougan points to Ethereum’s increasing competitiveness and Solana’s user-friendly appeal, overturning its outdated reputation for being slow and expensive. He also mentions the success of initiatives like Clanker and Virtuals on the Ethereum Base network, proving their ability to encourage creativity while maintaining a strong infrastructure.
The institutional appeal of Ethereum
Conversely, Ethereum has remained active. It recently attracted more than $850 million in institutional capital exchange traded funds (ETFs), demonstrating their continued attractiveness to investors. The prospect of Ethereum’s Petra upgrade is increasing excitement, promising substantial improvements in speed and overall performance.
Moreover, the price of Ethereum is expected to grow. Depending on increases in ETF sponsorship and institutional interest, some analysts estimate its value could reach $6,000 to $7,000 by 2025.
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A competitive environment
Both cryptocurrencies show particular strengths and shortcomings as we approach 2025. According to Hougan, Ethereum is likely to have a better chance of success in the future, given the explosive increase in transaction volume and user interaction. Still, Solana’s institutional support and great ecosystem cannot be overlooked.
Featured image of DALL-E, chart from TradingView
