Could Solana Beat Ethereum to Become the Largest Altcoin in 2025

Solana and Ethereum vied for supremacy throughout Q4 2024. Ethereum has generated over $850 million in institutional capital inflows into ETFs, while Solana has seen over $300 million in inflows across cross-chains in the past week.

Market experts and reports suggest that Solana is poised to beat Ethereum and replace ETH as the largest altcoin in crypto. Therefore, 2025 is a very important year for Ether and Solana; Solana’s competitive advantage lies in DEX metrics and growth potential, as well as increased capital inflows.

Solana’s win could lead to changes in portfolios, and if SOL dethrones ETH, there could be a correction in the Ethereum beta games. This in-depth review can effectively prepare investors for the changing dynamics in crypto.

Solana and Ethereum

Solana surpassed its rival Ether in many important areas in 2024. Solana, which surpassed Ethereum in October and November 2024, is neck and neck with Ether in December. Data from TheBlock shows that SOL and ETH compete in terms of application revenue, application fees, and decentralized exchange volume.

In terms of application fees, Ethereum raised $311.1 million this month compared to Solana’s $322.8 million.

Ethereum and Solana App fees | Source: TheBlock

Solana outperformed Ethereum in Application revenue in October and November 2024; In December, Ethereum reached $93.56 million and Solana dominated with $140.95 million.

Ethereum vs Solana App revenue | Source: TheBlock

According to TheBlock data, in terms of DEX volume, Solana is ahead with $67.43 billion, while Ethereum is behind with $52.37 billion. Solana-based DEXs observed massive token launches and trading in Q4 2024; this is likely the catalyst driving DEX volume on the SOL chain.

Ethereum and Solana DEX Volume | Source: TheBlock

Solana’s growing dominance in DeFi is evident from the comparison between the two chains. SOL looks poised to outperform Ethereum in DEX metrics in December as well, continuing its winning streak over the past two months.

These catalysts can support Solana adoption

Approval of the Solana ETF by the U.S. Securities and Exchange Commission could legitimize SOL and support the altcoin’s adoption among crypto market participants. Ethereum’s ETF adoption has spurred capital inflows into the altcoin, and last week alone ETH raised over $850 million from institutional investors.

Solana earned over $300 million from different blockchains last week, of which $200 million was transferred from Ethereum. Solana-based DEXs bridge the gap with centralized exchanges in the crypto ecosystem. Progress and scalability are gradually increasing the use of DEXs, further increasing the number of active users every week.

Anmol Singh, co-founder of Zeta Markets, told crypto.news in an exclusive interview:

“Solana is on track to become the dominant player in DeFi and on-chain applications by 2025. With its low fees, high speed, and growing ecosystem, it is perfectly positioned to absorb the capital flowing into DeFi. “Breakthroughs in DEX performance and scalability will continue to push centralized exchanges aside and shift the focus to decentralized platforms that are faster, fairer and more transparent.”

Crypto market participants are eagerly awaiting the Petra upgrade, which is expected to greatly increase Ethereum’s speed and performance. Meanwhile, Solana’s Frankendancer and Firedancer upgrades promise to transform the SOL network, improving availability, uptime and overall performance.

Technical analysis targets for Solana and Ethereum

Ethereum is trading close to its 2024 peak of $4,107. The altcoin is hovering around the psychologically important $4,000 level on Tuesday. Ethereum’s previous all-time high is $4,878 and the cycle target is $5,185, the 161.80% Fibonacci retracement level of the rally from the November 4 low of $2,361 to the 2024 high of $4,107.

The relative strength index reads 61 below the 70 level, which usually produces a sell signal. Moving average convergence divergence indicates an underlying bearish momentum in the Ethereum price trend.

In case of a correction, Ethereum could find support in the region between $3,252 and $3,680, as seen on the daily price chart.

ETH/USDT daily price chart | Source: Crypto.news

Solana’s daily chart shows upside potential in SOL. Solana traded at $219 on Tuesday. The Ethereum rival is currently gaining strength, but a daily candlestick close above $231.62 could signal the end of the sideways trend.

Solana may face resistance at the $264.59 top, and the cycle target is $359.81, which is the 161.80% Fibonacci retracement level of Solana’s price upside.

If Solana faces a correction, investors can mark $221.06 to $233.22 as a support zone for the altcoin.

SOL/USDT daily price chart | Source: Crypto.news Solana calms down after Pump.fun pulls the plug on live broadcasts

While the DEX’s growing popularity and higher DeFi token activity have positioned Solana as Ethereum’s biggest rival, launchpad Pump.fun’s decision to discontinue live streams may have slowed SOL’s progress.

The lag time SOL is experiencing in terms of on-chain activity and network revenue is likely the result of Pump.fun’s recent actions. The SOL network generated an average of approximately $5 million in fees per day; This is almost 50% lower than the network’s average daily fare produced in the third week of November, where it recorded its highest single-day revenue ever at $13.3 million.

It remains to be seen whether Solana will survive the slowdown, whether an ETF approval or higher DEX adoption will emerge as drivers of SOL adoption this cycle.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.