Solana’s Potential for an ETF: A Bold Prediction for 2025
While Solana currently lacks an exchange-traded fund (ETF), one of the asset’s most prominent advocates is optimistic that such a vehicle could emerge by 2025. This individual believes that Solana is in a prime position to outperform Ethereum’s ETF offerings. Kyle Samani of Multicoin Capital, a significant investor in SOL and various related protocols, has been vocal in urging the Securities and Exchange Commission (SEC) to consider a favorable stance on a Solana ETF.
During a recent appearance at Blockworks’ Digital Asset Summit in New York City, Samani elaborated on why he thinks Solana is better suited to attract traditional investors compared to Ethereum. His argument hinges on a crucial factor: the on-chain fees being generated relative to the overall value of the asset.
Samani stated, “A lot of the reason why the ETH ETF didn’t have a super strong reception was that many investors looked at ETH and asked, ‘Show me the fees.'” According to him, these investors found insufficient evidence to justify Ethereum’s high valuation. In the realm of stock trading, investors often rely on metrics like the price-to-earnings (P/E) ratio to assess whether a company is overvalued or undervalued, guiding their investment decisions.
Although the cryptocurrency market lacks a straightforward metric akin to the P/E ratio, blockchains still generate revenue, and their associated tokens can be analyzed in a similar manner. Samani argues that Solana’s theoretical P/E ratio appears far more appealing from an investment perspective than that of Ethereum. His calculations suggest that Solana is trading at a P/E ratio of approximately 30 to 50 times, whereas Ethereum’s figure is closer to an astonishing 1,000 times.
Samani asserted, “Solana’s P/E ratio is much more in line with high-growth tech stocks.” If this reasoning holds true, it stands to reason that traditional investors may perceive Solana as having greater upside potential compared to Ethereum, potentially leading to increased investment in the asset.
