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Solana's Upside Potential Could Outpace Ethereum, According to VanEck Digital Assets Research

By: illustrious
May 29, 2023 11:08 AM EDT
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Ethereum's burgeoning competitor, Solana (SOL), could harbor significant upside potential, provided certain conditions are fulfilled, as per the digital asset research wing of VanEck, an investment management firm.

Recently, VanEck unveiled a research report highlighting its long-term projections for Ethereum's price, predicting a substantial value of $51,000 by 2030 in an optimistic scenario. This bullish forecast relies heavily on the idea of Ethereum becoming the leading open-source global settlement network, adopted broadly across various business sectors.

VanEck's forecast explained, “We base these estimates on the thesis that Ethereum becomes the dominant open-source global settlement network that hosts substantial portions of the commercial activity of business sectors with the highest potential to gain from moving their business functions to public blockchains. In a portfolio of similar smart contract platforms, we assume to own a collection of call options, with the dominant platform likely to take a majority market share.”

However, during a recent Bankless interview, Matthew Sigel, the head of VanEck’s digital asset research, posited that Solana might benefit from the same growth trajectory, albeit with a heightened risk profile.

“In terms of upside, once you layer in our top two assumptions of the penetration rate, and then if you assume that Solana takes 70% of all of open-source blockchain activity, the upside becomes much higher, but with a much higher level of risk as well,” said Sigel, adding "we have more upside in tokens like ATOM and Solana, [but have] smaller position sizes because of the unknowns.”

In essence, despite the ostensibly greater upside potential of Solana compared to Ethereum, it also presents a higher risk due to its economic model. VanEck's research implies a cautious yet potentially rewarding outlook for Solana, underlining the need for more transparency and active participation in the network for it to realize its full potential.

Always experimenting.

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