Key Takeaways
- SOL’s market capitalization currently stands at $90 billion, trailing behind Ethereum’s $435 billion.
- The SOL/ETH ratio, currently favoring SOL, suggests potential for further gains.
- Can SOL take Ethereum’s throne, or are the challenges overwhelming despite its growth?
Amidst a cryptocurrency market downturn since March 14, SOL shows remarkable resilience by pushing through to new highs. Today, it moved above $200, surpassing BNB based on its market capitalization.
Excluding the stablecoin USDT, SOL has only ETH left to surpass to become the second largest cryptocurrency. How much further does SOL need to climb to claim the second spot, and is such a feat within reach?
After BNB, Can SOL Surpass Ethereum?
SOL has a market capitalization of $90 billion, while ETH is at $435 billion. A 483% increase is needed for SOL to surpass ETH, given the latter’s price does not budge at all.
At the current price with the current supply of slightly more than 443 million tokens, SOL would need to reach a price of $982 to surpass Ethereum’s market capitalization.
However, the supply of SOL has steadily increased over the last year. To the contrary, that of ETH has fallen , albeit only incrementally. As a result, a slightly lower figure will surpass ETH.
In January 2023, SOL had a circulating supply of 370 million tokens. In January 2024, the supply had ballooned to 432 million, an increase of 17%.
If in 2024 SOL’s supply increases at the same rate as it did in 2023, SOL will have a circulating supply of 506 million tokens at the start of January 2025.
At these figures, the SOL price would have to be $860 for it to surpass ETH, given the latter’s price stays the same, still a daunting task that requires a more than 300% increase.
Will SOL Outperform Ethereum?
The SOL/ETH chart shows that the ratio between the two is nearly at an all-time high favoring SOL. The all-time high of 0.058 ETH per 1 SOL was reached in November 2021. Interestingly, SOL is also expected to reach a new all-time high against the dollar in the near future.
The wave count (white) suggests an all-time high will be reached soon. It indicates that SOL is in the fifth and final wave of its upward movement that started in December 2022. Wave three extended and the sub-waves are in black.
If wave five also extends and has the same length as waves one and three combined, SOL/ETH will reach a new all-time high of 0.080, increasing by more than 40% from the current price.
If the ETH price stays at $3,600, this SOL/ETH ratio would lead to a SOL price of $290, far from the $860 target required for SOL to surpass ETH.
Depending on the SOL supply, a ratio near 0.25 will be required to do so, given that the ETH supply is nearly four times smaller than the SOL one.
SOL Faces Daunting Task to Flip Ethereum
To conclude, SOL has been the best performing Layer-1 token this cycle, posting a more than 1,300% increase since the start of 2023.
Despite this surge, it is unlikely that it will surpass ETH in the near future, due to the sheer ground it has to make up and the fact that the SOL/ETH chart could be in the final portion of its upward movement.
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