Assets management firm Grayscale expects Solana’s (SOL) rise to continue as it outperforms major crypto assets. In a recent market report, the firm noted that Solana trumped Ethereum this year due to meme coin trading on the network. This extends SOL’s upward run over top assets from 2023 when institutions increased their appetite in the market.
Last year, Solana was tagged as an institutional investor favorite after recording consecutive weekly inflows that boosted its total assets under management (AUM). Ethereum recorded a string of losses in the same time frame, with outflows mounting towards the end of the year.
In the report, Grayscale analysts point to meme coins on Solana as a key bull driver in the ecosystem. Solana meme coins have attracted community participation as adoption flows to the ecosystem. In Q1 2024, inflows to Solana tokens sparked the meme coin frenzy as the market cap crossed $70 billion.
Currently, Solana generates fees like Ethereum’s layer 1 with only a fraction of the market cap. With growing competition, if the network expands use cases to include decentralized physical infrastructure and stablecoins, the network will likely notch more inflows. SOL trades at $229, a 5% increase in the last 24 hours.
Ethereum Still Ignites Bull Interests
Although the altcoin leader has crawled compared to Bitcoin and Solana, the asset has had several high points. The approval of spot Ethereum ETF saw renewed institutional interest despite low price impacts. The staking feature, alongside its deep smart contract and decentralized finance (DeFi) volumes, attracts investors.
“Grayscale Research thinks that Ethereum is “playing the long game”: bootstrapping network effects by keeping fees low for Base and other Layer 2s. In a post-election regulatory environment, trends in institutional adoption of digital assets may help determine whether Ethereum’s scaling strategy will support its leading position among smart contract platforms over time.”
Altcoins Posts Mixed Numbers
Amid speculations of an imminent altcoin season, price fluctuations have led to assets hitting new highs while others struggle above waters. Ethereum trades at $3,688 with bulls looking towards $4K as the next target. Similarly, XRP soared to $2.60 flipping USDT to become the third largest crypto asset. Cardano (ADA) also crossed the $1 mark although recent numbers this week place the asset in the red zone. ADA exchanges hands at $1.22, down 4.8% today.