$1000 in Solana (SOL) or Ethereum (ETH)?

You are probably pretty low on dry powder right now. Most of us are. Real investment, not gambling, is about making choices. And you can have more great choices than you have $$ to invest. 

You can’t invest in everything. So today, we present you with a scenario. You have $1000. You can decide, whether should you invest it in Solana (SOL) or Ethereum (ETH). Both have strengths and clear weaknesses. Which do you prefer? Let’s analyze them both.

Pro SOL

So if you have $1000, would you put it in Solana or Ethereum? Let’s look at Solana first:

• ETF: The possibility of a SOL ETF is a point in favor of SOL. Let’s get real though. The chances of approval soon are low. But it could happen. Based on the Bitcoin and Ethereum ETFs, we think Solana will need a futures contract in the US first. Then after the futures contract has enough interest, a spot ETF could come after that. That’s how it has gone before but who knows?

And a change in SEC leadership that would come if Trump wins in November adds another wildcard into that decision process.

Source: X

• Memecoins: Memecoins are here to stay. The youngins love them. The gamblers love them. The degens love them. So, they are not going anywhere. And the undisputed home for memecoins now is Solana. Solana benefits as memecoins grow. Each one needs SOL to create one and accepts SOL as the payment when the memecoin lists on Jupiter or Raydium.

Check out all the new memecoins on SOL after the Trump assassination attempt last week. On Solana, the top 25 coins by total transactions were all memecoins with Jupiter in at #26. Even a couple of new ones in the name of new VP candidate JD Vance were in there. And almost $2 billion transactions in 24 hrs on the day we wrote this. And all those coins have SOL as the other side of that trading pair.

Source: X

• Fundamentals:  Solana is 6th in fees generated over the last 6 months. Ethereum, Tron, and Bitcoin are the only Layer 1 chains that generated more fees than Solana. That means lots of people are using it, especially since the fees on SOL are low.

Solana is also 2nd in weekly active users only behind Tron. And we know USDT on Tron is the product market fit for stablecoin use in emerging markets. SOL has over 4 million users per week. This is just more evidence that the memecoin craze is not going anywhere.

Many see Solana as THE retail chain now. Part due to memecoin usage. Part due to low fees. And part due to its architecture meaning you can do more on the L1 directly and not rely so much on Layer 2 solutions. Solana is also competing with Ethereum to be the top chain for NFTs.

All these things point in one direction. If you think retail interest in crypto will grow in the next few years, then you should be considering SOL for your $1000 investment

Pro ETH

Now let’s look at Ethereum. Here are some important features you should look at:

• Fundamentals: Ethereum is the #1 in fees over the last 6 months. This means people are still using it, or more likely, using its many Layer 2 solutions. Those L2s then pay ETH gas to broadcast the transactions back to the Layer 1 chain.

For monthly active users, ETH is 8th at 7.7 million. But that does put it behind Solana, as well as 2 EVM chains BNB Chain & Polygon, and one L2 Base. But you could argue that those 3 chains are proxies for ETH. In the case of Base, we know every transaction ends up paying ETH for gas, even the ones that pay in Optimism’s $OP for it. Eventually, it gets back to ETH.

Looking at only Layer 1 chains, ETH’s fees are even more dominant. In the last 6 months, they’ve almost doubled the fees of #2 Tron and have 2.5x more fees than #3 Bitcoin. And they’ve earned 6x more fees than #4 Solana. So, even though people don’t like it and complain about it, people still use Ethereum. Or they are using L2 where ETH earns fees for the final settlement of the transactions.

• DeFi: DeFi is flying under the radar as far as crypto sectors go. The related sector of tokenization of Real World Assets is a hot one. But Blackrock is coming. It makes sense that if they are targeting RWA, which they are, they would come for broader DeFi next.

Source: X

And when it comes to DeFi, there’s Ethereum. And then everyone else. It’s not even close. ETH has the most protocols. It has over 1100 of them. Only BNB Smart Chain and Arbitrum have at least half that number. And again, all Arbitrum trades get back to the ETH chain eventually. And TVL is 7x the #2 chain, Tron.

This is one area, other than DEXes for swaps and memecoin trades, where Solana has done very little to try to compete. Which Layer 1 do you do most of your transactions on these days? Let us know in the comments below.

The Decision

To summarize, with SOL, you have:

• Positive effects from the new ETF applications and possible approvals.
• The memecoin craze.
• A lot of fundamental proof that Solana is becoming the top retail chain in the industry.

Then for ETH, you have:

• Still the #1 chain in fees and other areas.
• The undisputed leader in DeFi, which we think will make a big comeback.
• The growth and launch of so many Layer 2s means more fees coming to the main Ethereum blockchain. That’s even for transactions that don’t take place there.

So which argument is more compelling to you? Which chain do you think is in the best position to grow over the next 2-3 years? Let us know in the comments.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.