Standard Chartered: Solana May Lag Behind Ethereum as Meme Coin Hype Cools

Solana Faces Short-Term Headwinds as Ethereum Maintains Broader Market Strength

The long-running debate between Ethereum and Solana continues to generate headlines—and this time, a major financial institution is weighing in. According to Standard Chartered, Solana (SOL) could underperform Ethereum (ETH) in the near term, primarily due to the fading momentum in meme coin activity, a key driver behind Solana’s recent growth.

Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, noted that Solana's rapid transaction capabilities and low fees made it a hub for meme coin trading during its recent surge. However, as that trend begins to cool, a usage gap may emerge.

"Solana’s dominance of meme coin trading is a double-edged sword," Kendrick explained. "With the meme coin boom likely past its peak, usage could decline before more sustainable applications take hold."

While Solana’s network has demonstrated technical prowess under high-volume conditions, its reliance on volatile and seasonal trends like meme coins may leave it exposed. In contrast, Ethereum continues to benefit from a broader spectrum of applications, including decentralized finance (DeFi), enterprise integrations, and developer infrastructure—factors that Kendrick suggests give it a longer-term edge.

Recent data backs this up. Analysts at IntoTheBlock also caution that Solana still trails Ethereum’s maturity and adoption.

“Solana may grow and compete in niche areas, but overtaking Ethereum in the near future remains unlikely,” said Juan Pellicer, Senior Research Analyst at IntoTheBlock.

Adding to the headwinds, Solana’s decentralized exchange (DEX) trading volumes have slipped, with Ethereum reclaiming dominance in that segment. Platforms like Raydium and Pump.fun—once major activity drivers—have seen reduced engagement, reinforcing concerns about a near-term lull.

Short-Term Market Sentiment Pressures SOL

Market indicators reflect this cautious outlook. Blockchain analytics firm Glassnode reports that Solana is the only top-10 non-stablecoin asset with a negative funding rate—currently at -0.0002%. This means traders are paying to hold short positions, often interpreted as a bearish signal.

However, not everyone sees this as a red flag. Some view it as a contrarian indicator, hinting at the possibility of a short squeeze. Accumulation by institutional investors and retail traders in May suggests confidence in Solana’s long-term potential, even as short-term volatility persists.

Ethereum's Institutional Tailwind Remains Strong

While Solana contends with shifting narratives, Ethereum’s momentum continues. Its entrenched position as the leading smart contract platform, along with ongoing institutional interest and protocol upgrades, reinforces its advantage.

And though Solana co-founder Raj Gokal recently faced a personal data leak tied to an unrelated social media breach, the network’s fundamentals remain intact. Still, incidents like these highlight the importance of operational and reputational resilience in the evolving crypto landscape.