Why Solana might find it ‘much harder’ to outperform Ethereum after ETF approval — TradingView News

Pseudonymous cryptocurrency trader Wazz Crypto discussed significant challenges Solana will face by outperforming Ethereum moving forward, addressing critical metrics and market dynamics.

What happened: Wazz makes a compelling argument suggesting that “it will be much harder for SOL to continue to outperform ETH from here on out.” He notes that even though SOL saw a 96% decline during the bear market, compared to ETH’s 75%, it was easier for SOL to achieve significant returns through simple mean reversion. However, they believe that “most of the change should be made”.

Quick overview of the historical performance of the two altcoins:

The trader notes the disparity in inflation rates between the two cryptocurrencies, with current ETH inflation at historic lows and SOL inflation significantly higher. “Current $ETH inflation is at an all-time low of $5 million per day, current $SOL inflation is $13 million per day.”

Additionally, the consequences of billions of SOL purchased by FTX between $60 and $80 presents an oversupply that could harm its performance.

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Read also: Will Solana or Dogecoin be the next Crypto ETF if Ethereum ETF is approved?

Why is this important: While recognizing Solana’s success in terms of on-chain activity, Wazz Crypto remains skeptical about its sustainability. “Solana’s on-chain business is all coin games, it’s doing very well, but I don’t know how long it will be sustainable with this high churn rate,” they warn.

On the other hand, they highlight the institutional advantage of Ethereum, notably with the possibility of ETF approval, and its strong DeFi ecosystem. “Defi on ETH/EVM is much more dynamic than Solana,” they add.

However, Wazz Crypto recognizes a potential upside for Solana. “I think the biggest advantage SOL could have here is for one of the DePin apps to actually take off and bring millions of users to the chain,” they concede, suggesting that a breakthrough app could change the dynamic.

The trader concludes: “The accumulation of value in ETH represents 15 times more capital stored there, which is mostly sticky and unlikely to move anytime soon,” he explains, emphasizing the stability and the attractiveness of ETH for investors.

And after: Ethereum’s influence as an institutional asset class is set to be explored in depth at Benzinga’s upcoming Future of Digital Assets event on November 19.

Read Next: Solana Meme Coin Platform Pump.Fun Tapped for $1.9 Million, Pledges to Refund Users

This content was partially produced using AI tools and was reviewed and published by Benzinga editors.

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