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As the year 2025 approaches, market experts are talking a lot about how much ethereum and Solana compete with each other. Both cryptocurrencies have grown by leaps and bounds in 2024, however, perspectives vary on which one will ultimately prevail in the altcoin industry in the coming year.
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Solana's rapid rise
Solana's outstanding numbers have sparked interest. It surpassed ethereum in several major benchmarks in December, including app revenue and decentralized exchange (DEX) volume: Solana generated around $141 million in app revenue; <a target="_blank" href="https://www.coingecko.com/en/coins/ethereum” target=”_blank” rel=”nofollow”>ethereum earned $93.56 million.
Furthermore, Solana's decentralized exchange volume reached an impressive $67.43 billion, in contrast to ethereum's $52.37 billion. This development has led several experts to predict that Solana could overtake ethereum as the preeminent cryptocurrency by 2025.
Analysts attribute Solana's success to its fast transaction speeds and minimal costs, making it especially attractive for decentralized finance (DeFi) and non-fungible token (nft) applications. The upcoming Firedancer update is anticipated to improve Solana's network performance, potentially reinforcing its status as a pioneer in the DeFi sector.
Will ethereum Overtake Solana?
Although Solana's statistics are excellent, Bitwise CIO Matt Hougan points to the rapid development of the ethereum ecosystem and projects that will allow it to surpass Solana by 2025. He emphasizes how <a target="_blank" href="https://www.coinbase.com/learn/crypto-basics/what-are-ethereum-layer-2-blockchains-and-how-do-they-work” target=”_blank” rel=”nofollow”>Layer 2 solutions such as Base, Optimism and Arbitrum help ethereum scalability, thus closing the gap between institutional trust and daily access.
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People's mental model of ethereum is outdated. The common consensus is that Solana is cheap/easy/fun and ethereum is slow/unwieldy/expensive.
But look at what's happening in the ai agent space. Some of the most exciting “fun” projects, such as Clanker and Virtuals, are being developed…
– Matt Hougan (@Matt_Hougan) <a target="_blank" href="https://twitter.com/Matt_Hougan/status/1869483554197086657?ref_src=twsrc%5Etfw” rel=”nofollow”>December 18, 2024
Hougan points to ethereum's growing competitiveness with Solana's easy-to-use appeal, thereby negating its dated reputation of being slow and expensive. He also mentions the success of initiatives like Clanker and Virtuals on the ethereum Base network, demonstrating their ability to foster creativity while preserving a robust infrastructure.
The institutional attraction of ethereum
By contrast, ethereum has remained active. It recently attracted more than $850 million in institutional capital inflows to <a target="_blank" href="https://www.forbes.com/sites/digital-assets/article/what-is-ethereum-spot-etf/” target=”_blank” rel=”nofollow”>exchange traded funds (ETF), demonstrating its sustained appeal to investors. Anticipation of ethereum's Petra upgrade is building excitement, promising substantial improvements in overall speed and performance.
Furthermore, the price of ethereum is expected to increase. Depending on the rise in ETF sponsorships and institutional interest, some analysts estimate it could be worth between $6,000 and $7,000 by 2025.
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A competitive environment
Both cryptocurrencies exhibit special strengths and shortcomings as we approach 2025. According to Hougan, ethereum is more likely to succeed in the future given its explosive rise in transaction volume and user engagement. Still, the institutional support and the great Solana ecosystem cannot be overlooked.
Featured image of DALL-E, TradingView chart
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