Bitcoin
BTC$60 907.24

2.74%

Ethereum
ETH$3 249.66

1.95%

Tether
USDT$1.000483

0.01%

Binance Coin
BNB$545.47

2.44%

Solana
SOL$147.48

3.98%

USD Coin
USDC$1.000054

-0.01%

Solana vs. Ethereum: Which one is the Better Investment?


December 2022

Understanding the difference between Solana and Ethereum can give you an insight into how to invest in both. When debating Solana vs. Ethereum, you should understand that there are many similarities. Still, at the same time, some differences can lead to a difference in the pricing of both assets. Comparing Solana with Ethereum is relatively straightforward for the most part, as they serve many of the same basic needs.

Understanding how Solana works can be helpful when comparing it to the Ethereum blockchain, which can guide your investing thesis.

What is Solana, and how does it work?

Solana is a blockchain platform designed to host scalable and decentralized applications. It can process more transactions than most of its rivals, like Ethereum.  Solana is a proof-of-stake blockchain that uses a new technology called Proof of History. 

Ethereum: The basics

To understand the difference between Ethereum and Solana, you will need to understand some of the basics regarding the Ethereum blockchain. While they are somewhat similar, Ethereum has a long history.

What is Ethereum, and how does it work?

Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network. It securely executes and verifies application code called “smart contracts.” They allow participants to interact with each other without a centralized authority. It is considered a “trustless platform.” 

Critical differences between Solana and Ethereum

To understand the value proposition that each one of these coins offers, you need to understand some of the critical differences between Solana and Ethereum. 

What Makes Ethereum and Solana Similar?

It should be noted that there are some similarities between the two markets, and therefore there are some overlapping qualities that you should be aware of. After all, you are trying to compare a couple of assets, but you also understand that the networks are trying to solve similar problems. 

Ethereum vs. Solana: Comparison

Feature Solana Ethereum
Date Founded 2018 2013
Ticker SOL ETH
Market Cap (Q3 2022) $12 billion $164 billion
General Purpose Decentralized verifications same
Transaction Function Proof-of-Stake using Proof-of-History POS
Mining Standard Proof-of-Stake Proof-of-Stake
Maximum Available Supply 489 million None
How Is the Currency Used? Transactions, verifying Same
What Influences the Value? Network growth, demand for transactions Same
Invented by: Anatoly Yakovenko Vitalik Buterin

 Solana started at $0.04 during the initial seed sale on April 5, 2018. It hit an all-time high of $259.01 at its peak in November 2021. By contrast, Ethereum started with a price of $0.311 during its 2015 launch, rising to nearly $4800 in 2021. In 2022, both markets have fallen drastically as crypto has entered another “crypto winter,” which is when prices crater and crypto falls out of favor. However, we have seen this before and will more likely than not see crypto recover again.

Solana vs. Ethereum: Which one is the better investment?

Regarding which coin is the better investment, it probably comes down to balance in your portfolio. Both have a reasonably strong chance of becoming mainstays regarding crypto, but Ethereum certainly has the lead. 

Conclusion

When it comes to Solana vs. Ethereum, the Ethereum market is more established, but Solana is trying to catch up to Ethereum. Both of these networks have a strong future, but whether or not the price follows suit is a completely different argument. Most crypto enthusiasts own a certain amount of Ethereum, but Solana might make an excellent addition to your portfolio. 

Crypto is a very volatile asset class under the best of circumstances, but Ethereum is the second largest coin by market cap, with Solana being the ninth largest. As a result, Solana does tend to be even more volatile than Ethereum, but they both are more likely than not going to be solving similar problems in the future. As time goes on, they may split a bit as far as their uses, so they may begin to differentiate themselves and, therefore, their respective volatility profiles.

At this point, Ethereum should continue to outperform Solana, but Solana will hold its own  as part of your portfolio going forward. It has much more momentum most of the time, simply because the market is quite a bit smaller. Either way, you should have both Solana and Ethereum as part of your crypto investments. You can easily trade Solana and Ethereum through the CFD markets at PrimeXBT. This is a way to benefit from the price moves without taking custody.

FAQ: Frequently Asked Questions

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 72.4% 48 $60 907.24 2.74% 7.95% $1 201 110 545 769 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 77.6% 46 $3 249.66 1.95% 10.59% $390 660 724 581 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 92.8% 1 $1.000483 0.01% 0.06% $112 521 291 389 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 74.8% 48 $545.47 2.44% 10.66% $80 502 405 442 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 83.6% 25 $147.48 3.98% 10.54% $68 439 891 003 SOL 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 95.2% 1 $1.000054 -0.01% 0.01% $33 955 441 106 USDC 7 days price change
7 XRP (XRP) XRP XRP predictions 82.4% 29 $0.529085 0.59% 25.61% $29 525 795 272 XRP 7 days price change
8 Toncoin (TON) TON Toncoin predictions 82% 27 $7.39 1.21% 3.73% $18 514 454 508 TON 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 73.6% 54 $0.115147 2.08% 10.19% $16 709 822 671 DOGE 7 days price change
10 Cardano (ADA) ADA Cardano predictions 78.8% 36 $0.433919 -1.12% 24.20% $15 569 472 122 ADA 7 days price change
11 TRON (TRX) TRX TRON predictions 80.8% 37 $0.137615 -1.83% 10.19% $11 989 577 434 TRX 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 74.4% 48 $26.45 1.86% 2.73% $10 436 162 041 AVAX 7 days price change
13 SHIBA INU (SHIB) SHIB SHIBA INU predictions 74.4% 42 $0.000018 1.88% 12.93% $10 321 337 154 SHIB 7 days price change
14 Lido stETH (STETH) STETH Lido stETH predictions 91.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
15 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 92% 1 $0.116354 -0.46% 0.23% $10 171 995 609 WTRX 7 days price change

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