A recent report highlighted three main reasons why Solana (SOL) has struggled to keep up with Ethereum (ETH), at least in terms of market performance beyond daily price changes. Market expert Dominic Basulto from The Motley Fool pointed to factors that, in his view, have shaped investor sentiment and slowed Solana’s momentum in key areas.
The Meme Coin Hangover
One of the biggest drivers, Basulto said, is that many investors still associate Solana with the meme coin craze of 2024. During that time, Solana became the go-to platform for creating and trading meme coins, and the idea of a “meme coin supercycle” was often discussed. At its peak, the meme coin market was worth around $150 billion. Today, Basulto noted, that segment is worth less than $40 billion, and many individual meme coins are still far below their 2024 highs. According to the expert, the link between Solana and that hype cycle never fully faded for some investors, which may have led to ongoing hesitation about the network.
The Mobile Crypto Push That Didn’t Take Off
A second reason involves Solana’s attempt to build a mobile-first crypto ecosystem—and the belief that it never lived up to its early promises. In June 2022, Solana announced the launch of a mobile device called Saga, along with a broader mobile strategy. Basulto noted that the Saga was marketed as a breakthrough, but at $999, it struggled to compete with mainstream smartphones. While Solana later introduced a cheaper alternative, the larger idea of creating a mobile crypto environment didn’t seem to catch on with investors or consumers at the scale needed to create a lasting advantage.
Solana ETF Momentum Falls Short
The third reason Basulto raised focuses on Solana exchange-traded funds (ETFs) and the expectation that they would attract significant institutional interest. He pointed out that eight spot Solana ETFs are now trading in the US, but they haven’t gained the momentum seen with spot Bitcoin (BTC) ETFs, which launched in January 2024. The rollout of spot Solana ETFs was widely seen as a potential catalyst—something that could bring more institutional capital into the space. Instead, Basulto said, Solana ETF momentum has remained limited. He estimated that total assets under management (AUM) for spot Solana ETFs are currently about $1.1 billion, which is a stark contrast to spot Bitcoin ETFs, which reportedly pulled in $100 billion in less than 12 months.
Still a Strong Long-Term Bet?
Even so, Basulto’s overall conclusion wasn’t pessimistic. He argued that Solana might still be a stronger long-term investment compared to Ethereum, based on what he described as a clear shift in Solana’s direction. In his view, Solana is moving away from meme coins and toward stablecoins, while also strengthening its presence in decentralized finance (DeFi). Basulto added that Solana remains faster and cheaper than Ethereum, and these advantages could continue to attract developers and users over time.
At the time of writing, SOL was trading at around $86, with losses across all time frames, amounting to a 51% drop year-to-date (YTD). Meanwhile, ETH was trading just above $2,100, also recording losses across all time frames and a YTD decline of 20%.
Featured image created with OpenArt, chart from TradingView.com.
Frequently Asked Questions
Here is a list of FAQs based on the topic Solana vs Ethereum Whats Slowing Down Growth 3 Reasons SOL Is Still Falling Behind
BeginnerLevel Questions
1 What is the main difference between Solana and Ethereum
Answer Think of Ethereum as a secure welltested highway that gets congested easily Solana is a newer faster racetrack designed to handle way more cars at a lower cost but its had a few crashes
2 Why do people say Solana is faster than Ethereum
Answer Solana can process thousands of transactions per second while Ethereum currently handles about 1530 Solana achieves this using a unique system called Proof of History that timestamps transactions very efficiently
3 If Solana is faster and cheaper why isnt it winning
Answer Speed and low cost arent everything Ethereum has a massive head start with more developers more apps and a proven track record of stability Solana is still trying to prove it can stay online and secure 247
4 What does network outage mean for Solana
Answer It means the entire Solana blockchain stopped processing transactions for a period of time Imagine the racetrack suddenly closing for repairs This has happened several times which scares away big investors and businesses
IntermediateLevel Questions
5 What are the 3 Reasons SOL is falling behind Ethereum
Answer The three main reasons are
1 Reliability Issues Frequent network outages and congestion erode trust
2 Centralization Concerns Solanas network relies on fewer more powerful validators making it less decentralized than Ethereum
3 Ecosystem Maturity Ethereum has a much deeper pool of developers established DeFi protocols and more total value locked in its apps
6 Is Solanas lower price a sign its failing