Solana Outpaces Ethereum on Key Metrics Yet Remains 5x Undervalued
Quick Take Summary is AI generated, newsroom reviewed. Analysts argue Solana (SOL) is undervalued by 5x compared to Ethereum (ETH) despite leading on key metrics like speed, cost, volume, and active users. Solana's market cap ($131B) is a fraction of Ethereum's ($560B), which analysts attribute to the lack of institutional investment channels (ETFs, corporate treasuries). Solana's recent upgrades (Alpenglow) push transaction finality to 150ms, reinforcing its technical lead for high-frequency trading and s
Solana strong fundamentals are increasingly catching the market’s attention. Despite outperforming Ethereum on almost every technical and usage metric. Analysts argue that SOL is still undervalued by nearly 5x compared to Ethereum. The debate over which blockchain leads the next phase of digital finance is heating up.
Solana Leads on Core Metrics
According to Viktor Fischer, CEO of RockawayX, Solana now dominates key blockchain performance indicators. It includes transaction speed, cost efficiency, network traction and trading volume. Fischer noted that SOL’s growth is remarkable across several categories. Yet institutional adoption remains in its early stages. Data compiled by whysolana.com shows Solana’s ecosystem leading in six core areas. The fastest transaction speeds, most active users, highest trading volume, most issued tokens, lowest transaction costs and the largest stablecoin transfer volume.
Despite this dominance, Solana’s market capitalization stands at around $131 billion, a fraction of Ethereum’s $560 billion valuation. Analysts suggest this gap reflects a lack of institutional investment channels, such as ETFs and corporate treasury holdings. Rather than any weakness in SOL’s performance. Currently, only five public companies hold Solana on their balance sheets. It compared to 16 holding Ethereum and 165 holding Bitcoin. Ethereum also benefits from 21 approved ETFs, a factor that has significantly boosted its institutional liquidity.
Institutional Gap, Market Opportunity
The lack of regulated investment products for SOL is seen as one of the last barriers to full institutional adoption. Once Solana ETFs gain approval, analysts believe the valuation gap could close rapidly. Fischer emphasized that Solana remains “early in adoption by institutional finance.” He pointed to its limited exposure among fund managers and corporate treasuries. But its technical edge positions it as a prime candidate for the next wave of digital asset ETFs. As Solana expands its role in tokenized assets (DATs), stablecoin payments and high-frequency trading. The institutional players are expected to take notice. For now, retail and developer activity continue to be SOL’s strongest growth engines.
SOL/ETH Ratio Suggests Room for Growth
Further supporting the undervaluation claim, Matthew Sigel, Head of Digital Asset Research at VanEck. He shared data showing Solana’s growing momentum relative to Ethereum. According to Sigel, Solana added over $2 billion in stablecoin volume in September, pushing its total to $14.3 billion. The network also captured 60% of tokenized stock trading activity last month.
SOL/ETH chart shared by @matthew_sigel on X
Sigel highlighted Solana’s Alpenglow upgrade. This reduced transaction finality to 150 milliseconds, one of the fastest in blockchain history. The upcoming Firedancer client and P-token framework are expected to push throughput even further. It reinforces SOL’s performance lead. Still, Sigel noted that the SOL/ETH ratio remains below its long term trendline. It is suggesting that Solana’s recent outperformance has yet to be fully reflected in price. Historically, similar divergences have preceded major upward moves in the ratio.
The Road Ahead
SOL’s position as the “youngest major chain” comes with advantages and challenges. It has less institutional history than Ethereum. But offers a more scalable foundation for next-generation finance applications. Its low fees, high speed and robust app ecosystem make it a favorite among developers and retail users alike.
As Fischer summarized, Solana “leads on all metrics important for internet capital markets.” Yet, until the broader financial system catches up. The blockchain’s valuation may continue to lag behind its true performance. For investors, that disconnect could represent one of the biggest opportunities in digital assets today. A high-speed network is proving its dominance while still trading at a deep discount to its rivals.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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