🛑🛑🛑 STANDARD CHARTERED SEES SOLANA REACHING $500 BY 2029, BUT EXPECTS IT TO UNDERPERFORM ETHEREUM IN THE NEAR TERM
Standard Chartered Bank has initiated coverage on Solana, predicting the token will underperform Ethereum over the next two to three years due to its overreliance on memecoin trading, but expects
SOL -0.52%
to rise from its current price of around $175 to $500 by 2029 — though with slower near-term upside compared to
ETH +2.97%
"Solana's current uses are very trading-heavy. Within trading, Solana dominates memecoin trading," Geoffrey Kendrick, Standard Chartered's global head of digital assets research, wrote in a report published Tuesday and shared with The Block. "This is because of its ability to process a large number of transactions simultaneously while maintaining low fees for users."
While memecoin trading has stress-tested Solana's infrastructure, it's not a sustainable growth driver, according to Kendrick, who said the market is applying a discount to Solana's future earnings from the memecoin sector, which appears to have passed its peak.
"Solana trades' cheap' on our market cap-to-GDP metric, whereas BNB (another Layer 1 smart contract platform) trades 'rich' due to its unique link to Binance's centralized exchange," Kendrick said. He defines a blockchain's GDP, or gross domestic product, as the total revenue generated by the applications and protocols built on it.
With memecoin activity likely past its peak and #Solana trading 'cheap' to its GDP, near-term performance could suffer. "Declining usage and trading 'cheap' are not a good mix," Kendrick said.
While Solana is well-positioned to support future sectors that need fast, low-cost transactions — such as financial apps, social media and decentralized physical infrastructure networks (DePIN) — Kendrick expects these areas will take another two to three years to scale, as projects launched during the 2021 DeFi peak mature.
