- Solana could quadruple in 2025, says Standard Chartered analyst.
- That would put the asset at a $264 billion market value.
Solana’s SOL token has rebounded 900% since plummeting in the aftermath of crypto exchange FTX’s 2022 collapse.
Still, it could further quadruple by the end of 2025, Geoff Kendrick, global head of digital assets research at Standard Chartered Bank, told DL News.
Based on SOL’s current price of around $140, that would put it at $560, with a total market value of $264 billion.
But Kendrick’s lofty target for Solana depends on three big factors over the coming months.
The US election
First, there’s the 2024 general election in the US. Standard Chartered said its Solana price target is more justifiable if former President Donald Trump returns to the White House for a second term.
“A Trump administration would be more supportive of the broader digital assets ecosystem than a Harris administration,” Kendrick said in a recent report. “The introduction of a SOL ETF would also be more likely under a Trump presidency.”
Some investors speculate that a spot Solana exchange-traded fund could be next after the US Securities and Exchange Commission approved spot Ethereum ETFs earlier this year.
Kendrick isn’t bearish on SOL under a potential Kamala Harris administration, though. He forecasts that should the vice president win in November, SOL will still double in value.
New Solana tech
Another variable is whether Solana can successfully ramp-up the number of transactions it can handle.
Firedancer, a new validator client being developed by Jump Crypto, is key.
It aims to increase Solana’s theoretical throughput from 50,000 transactions per second to over 600,000.
“Current price metrics will only prove sustainable, in our view, if Solana can achieve a 100-400x increase in throughput,” Standard Chartered said. “This would require Firedancer to be active.”
Solana handles around 3,200 transactions per second, according to data dashboard Solana Beach.
There are, however, several risks.
Building and launching Firedancer is a massive technical undertaking. A lot could go wrong.
And other newer blockchains like Sui and Aptos already claim to offer higher transaction throughput than Solana.
More users
Building the infrastructure for higher throughput is only half the battle — Solana also needs to get more people using it.
Standard Chartered said Solana needs to establish dominance across finance, something it could do via its recent Visa partnership.
It could also increase use through consumer apps like decentralised social media platforms and decentralised physical infrastructure networks, or DePINs.
Core to the bank’s outlook is the ratio of Solana’s market value to the fees it generates, a method of weighing a blockchain’s valuation against its use.
Solana’s market value is 250 times the fees it generates. Ethereum, the biggest smart contract network, has a multiple of 121.
According to Kendrick, this means Solana is “richly valued” versus Ethereum based on the ratio of its market value and fees.
In other words, either Solana is overvalued, or Ethereum is undervalued.
But if Solana is indeed overvalued, the report said, that’s only testament to the fact that traders think SOL is going much higher in the future.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
