Standard Chartered Forecasts Solana’s Potential in 2024 Election Context

Cryptonews Politics Dante Raeburn October 9, 2024

Standard Chartered Forecasts Solana’s Potential in 2024 Election Context

Standard Chartered anticipates that Solana (SOL), despite being considered overvalued relative to Ethereum (ETH), could outperform in a Trump presidency due to favorable anticipated regulations. The analysts predict significant future gains for Ethereum and Bitcoin as well, regardless of who wins the election.

Standard Chartered’s analysts have classified Solana as being ‘richly valued’ in comparison to Ethereum (ETH), yet they predict it may still outperform in the event of Donald Trump’s electoral victory. Geoff Kendrick, global head of digital assets research at the bank, indicated that the potential for more favorable cryptocurrency regulations and higher acceptance of spot-based Solana exchange-traded funds (ETFs) under a Trump administration could positively influence Solana’s market performance, whereas a leadership led by Kamala Harris might suppress the performance of smaller, risk-oriented cryptocurrencies. According to their forecasts, under Trump’s administration, Solana (SOL) is expected to be the leading performer among the top three cryptocurrencies, followed by Ethereum and Bitcoin (BTC). Conversely, under a Harris-led administration, Bitcoin is projected to take the lead, with Ethereum next and Solana lagging behind. Regardless of the election outcome, the analysts maintain an optimistic outlook on the cryptocurrency market as a whole, anticipating that Ethereum may climb to $7,000 by the end of 2025 if Harris wins and potentially reach $10,000 if Trump is elected. Bitcoin could rise to an impressive $200,000 during the same period, as per the report. Kendrick noted that while Ethereum continues to dominate as a layer-1 blockchain network, Solana’s increasing activity and the recent surge in SOL prices raise questions about its valuation. Standard Chartered pointed out that the current metrics suggest that Solana is overpriced relative to Ethereum—specifically, SOL’s market capitalization in relation to network fee revenues sits at 250, which more than doubles ETH’s figure of 121. Furthermore, Solana experiences an annual supply increase of approximately 5.5%, in sharp contrast to Ethereum’s annual token inflation rate of roughly 0.5%. Consequently, the staking yields reveal a disparity: Solana stands at 1%, whereas Ethereum offers a yield of 2.3%. Additionally, only 9% of established developers in the blockchain space are engaged with Solana, compared to 38% working with Ethereum. Kendrick emphasized, “SOL valuation metrics suggest the market is pricing in a very bright growth future for Solana, with a 100-400x increase in throughput expected,” adding that such valuations would find easier justification under Trump than under Harris. To support its current valuation, Solana must secure dominance across multiple high-traffic crypto sectors, including finance, consumer applications, and decentralized physical infrastructure (DePIN), while activating the Firedancer client to enhance efficiency.

The discussion around Solana, Ethereum, and Bitcoin is set against the backdrop of the upcoming 2024 presidential election. Analysts from Standard Chartered are examining how the electoral outcome may influence cryptocurrency regulations. With cryptocurrency markets responding to regulatory clarity, a Trump presidency is viewed favorably by analysts as leading to more conducive conditions for crypto growth, particularly for Solana. The contrasting expectations under a potential Kamala Harris administration suggest a cautious environment for smaller cryptocurrencies. Analysts’ assessments also reflect broader trends in the blockchain and cryptocurrency space, where Ethereum has maintained a dominant position despite the emergence of other competitors like Solana.

In summary, Standard Chartered’s analysis reveals that while Solana is presently deemed overvalued when compared to Ethereum, it harbors the potential to outperform its rivals should Donald Trump win the presidency. Their methodical evaluation highlights meritorious factors influencing each cryptocurrency’s value, including regulatory environments and market activity. Ultimately, both Bitcoin and Ethereum are projected for substantial growth in the coming years, irrespective of the election results, indicating a generally bullish sentiment towards the broader cryptocurrency market.

Original Source: www.coindesk.com