Should I buy ETH or SOL? Standard Chartered analysts believe that the recent institutional bets on Ethereum mean that Solana will face challenges in the short term.

In the latest episode of the Lightspeed Podcast, host Jack Kubinec interviewed Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, discussing the bank's recent release of its first Solana research report. This report not only represents the growing attention of Financial Institutions toward the Solana ecosystem but also reflects SOL's gradual establishment of a position in the traditional investment market. Kendrick shared his analysis of the future price trends of Ethereum (ETH) and Solana (SOL). He pointed out that although Solana has bullish long-term potential, in the medium to short term, Ethereum may perform better, especially as institutional funds have recently accelerated their inflow, stimulating ETH's price. Below is a summary analysis of the interview content. Pure market observation, not any investment advice.

Maintain a bullish outlook on SOL's long-term development.

The Solana research report from Standard Chartered Bank is the institution's first formal analysis report on Solana, showing that the appeal of Solana among institutional investors is gradually increasing. The report gives a rather optimistic price forecast for SOL, with Standard Chartered setting a target price of $275 by the end of the year, and estimating it to reach $500 by 2029.

Solana leads ETH due to the Memecoin craze.

Although Solana's market capitalization is only a quarter of Ethereum's, its actual economic value, represented by the total of transaction fees and tips corresponding to block space demand, once significantly outpaced ETH, demonstrating Solana's strength in on-chain activity, especially in 2023, when the trading activity driven by the Memecoin craze propelled Solana to rapidly ascend as the most popular cryptocurrency.

Analysts believe that the peak period for meme coins has passed, and the activity of SOL is likely to slow down.

Kendrick reminds the public that the trading volume of SOL driven by Memecoin is nearing its peak, and the activity of Solana may slow down in the short term, causing the coin price to stagnate. Host Jack Kubinec, however, holds a different view, believing that the trading volume and stickiness of Memecoin are still higher than expected.

Is ETH L2 expansion a depreciation pressure?

Although Ethereum's Layer 2 solutions help to scale the network, they are also believed to potentially undermine the value growth of ETH itself, as a significant amount of transaction activity shifts to L2, resulting in a noticeable decrease in fees paid to the main chain, which puts pressure on ETH's economic model.

The bearish sentiment of ETH has been digested by the market.

Kendrick pointed out that although Ethereum often faces a lot of negative sentiment and market concerns, these unfavorable factors have, in his view, already been digested by the market. He added that there is a lot of discussion about whether Layer 2 adds value or undermines ETH's value; for the time being, these debates have basically been reflected in price fluctuations, and the market has already digested the negative sentiment.

Regardless of how the long-term performance of ETH or SOL will develop, recent market data indicates that Kendrick's viewpoint has initially gained market validation. Over the past month, SOL has decreased by nearly 15% compared to ETH's price increase ratio. ETH is gradually attracting more institutional investors' attention, while Solana's upward momentum may temporarily slow down.

This article discusses whether to buy ETH or SOL? Standard Chartered analysts believe that institutions betting on Ethereum recently suggests that Solana will face challenges in the short term. First appeared on Chain News ABMedia.