Could Solana beat Ethereum to become the largest altcoin in 2025?

Solana and ethereum have competed for dominance during the fourth quarter of 2024. ethereum secured more than $850 million in institutional capital inflows to ETFs, while Solana attracted more than $300 million in cross-chain inflows over the past week.

Market experts and reports suggest that Solana is poised to beat ethereum and replace eth as the largest altcoin in crypto. Therefore, 2025 is a crucial year for Ether and Solana; the latter's competitive advantage lies in the DEX metrics and its growth potential along with increasing capital inflows.

Solana's victory could bring changes to portfolios and ethereum's beta plays could see a correction should SOL dethrone eth. This deep dive can effectively prepare traders for the changing dynamics of cryptocurrencies.

<h2 class="wp-block-heading" id="solana-vs-ethereum“>Solana vs. ethereum

Solana surpassed its competitor Ether in several key areas in 2024. After surpassing ethereum in October and November 2024, Solana is neck and neck with Ether in December. TheBlock data shows that SOL and eth compete in app revenue, app fees, and decentralized exchange volume.

In terms of application fees, ethereum earned $311.1 million this month, compared to $322.8 million for Solana.

Solana surpassed ethereum in app revenue in October and November 2024, in December ethereum recorded $93.56 million and Solana dominated with $140.95 million.

In terms of DEX volume, Solana leads with $67.43 billion, ethereum lags behind with $52.37 billion, according to data from TheBlock. Solana-based DEXs have seen a high volume of token launches and transactions in Q4 2024; this is likely the catalyst driving DEX volume on the SOL chain.

Solana's growing dominance in DeFi is evident from the comparison between the two chains. SOL also looks set to surpass ethereum in DEX metrics in December, extending its streak of the past two months.

These catalysts could drive Solana adoption

Approval of the Solana ETF by the US Securities and Exchange Commission could legitimize SOL and bolster adoption of the altcoin among cryptocurrency market participants. Adoption of the ethereum ETF supported capital inflows into the altcoin and in the last week alone, eth raised over $850 million from institutional investors.

Solana earned more than $300 million from different blockchains, of which $200 million was transferred from ethereum, last week. Solana-based DEXs are closing the gap with centralized exchanges in the crypto ecosystem. Advancement and scalability are slowly strengthening the usefulness of DEXs and increasing the number of active users every week.

Anmol Singh, co-founder of Zeta Markets, told crypto.news in an exclusive interview:

“Solana is on track to establish itself as the dominant player in DeFi and on-chain applications by 2025. With its low fees, high speed and growing ecosystem, it is perfectly positioned to absorb the capital flowing into DeFi. “Advances in DEX performance and scalability will continue to eliminate centralized exchanges, shifting the focus toward decentralized platforms that are faster, fairer, and more transparent.”

crypto market participants are looking forward to the Petra upgrade, which is expected to greatly improve the speed and performance of ethereum. Meanwhile, Solana's Frankendancer and Firedancer updates promise to transform the SOL network, increasing accessibility, uptime, and overall performance.

<h2 class="wp-block-heading" id="technical-analysis-targets-for-solana-and-ethereum“>Technical Analysis Targets for Solana and ethereum

ethereum is trading near its 2024 high of $4,107. The altcoin hovers around the psychologically important $4,000 level on Tuesday. ethereum's previous all-time high is $4,878 and the cycle target is $5,185, the 161.80% Fibonacci retracement level of the rally from the Nov. 4 low of $2,361 to the 2024 high of $4,107. dollars.

The relative strength index is 61, below the 70 level, which normally generates a sell signal. The moving average convergence divergence indicates an underlying bearish momentum in the ethereum price trend.

ethereum could find support in the zone between $3,252 and $3,680, as seen on the daily price chart, in case of a correction.

Solana daily chart shows profit potential in SOL. Solana is trading at $219 on Tuesday. The ethereum competitor is currently consolidating, however, a daily candle close above $231.62 could mark the end of the sideways trend.

Solana could face resistance at the peak of $264.59 and the cycle target is $359.81, the 161.80% Fibonacci retracement level of the Solana price rally.

If Solana faces a correction, traders could mark $221.06 to $233.22 as a support zone for the altcoin.

Solana goes cold after Pump.fun disconnects live streams

While the growing popularity of DEXs and increased DeFi token activity positioned Solana as one of ethereum's top competitors, launchpad Pump.fun's decision to end livestreams may have slowed SOL's progress.

The cooling in terms of on-chain activity and network revenue experienced by SOL is likely a result of Pump.fun's recent steps. The SOL network generated an average of nearly $5 million in fees per day, nearly 50% less than the network's average daily fees generated during the third week of November, where it recorded the highest single-day revenue at $13.3 millions.

It remains to be seen whether Solana will recover from the slowdown; ETF approval or increased DEX adoption could emerge as drivers of SOL adoption this cycle.