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

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.