Solana‘s price will probably underperform rival Ethereum‘s over the next “two to three years” because of scaling issues that currently prevent the blockchain from having wider application than its current meme coin focus, international banking group Standard Chartered said in initiating coverage of the crypto on Tuesday. 

The Solana-Ethereum price ratio is likely to rise from its current level of 14 to 17 through 2028 before dipping again in 2029, Standard Chartered Head of Digital Assets Geoffrey Kendrick wrote, meaning that one SOL would trade at a significantly lower amount than its Layer-1 blockchain competitor.  

SOL was recently trading at about $180, up about 2% over the past 24 hours and more than 19% during the past month, while ETH was changing hands at nearly $2,700, a 4.5% gain and nearly 50% increase during the past 30 days, according to data provider CoinGecko.

Solana hit a record high in January of a little over $293. In his note, Kendrick forecast the crypto hitting $275 by year’s end and $500 by the close of 2029. He expects ETH, which reached its all-time $4,878 set in 2021, to reach $4,000 this year and $7,500 in 2029.

“Beyond meme coin trading, Solana should dominate future sectors with high transaction volumes, low transaction costs and fast transaction times as they develop–in particular, high-throughput financial apps and traditional consumer apps like social media,” Kendrick wrote. “However, achieving scale in these areas may be some years away.”

The note comes as Solana has been unable to keep pace with Ethereum, which has surged over the past month. These trends have reversed those from earlier in the year when SOL was soaring amid intense interest in meme coins that favored the network over Ethereum because of its speed and efficiency.

In the interim, the meme frenzy has waned and Ethereum has boosted its prospects via the Pectra upgrade that boosted security and efficiency and increased the number of tokens that can be staked from an account helped spur an Ethereum rally. 

“Solana…has been optimized to produce fast, cheap and reliable transaction confirmation,” Kendrick wrote. “As a result, it dominates in areas that demand high-volume, low-transaction-cost solutions. So far, this has been mostly in meme coin trading, which accounts for the majority of activity on Solana.”

He added: “Solana trades ‘cheap’ to its achieved GDP [application revenue]…As well as being heavily discounted, meme coin activity associated with Solana appears to be past its peak. Declining usage and trading ‘cheap’ are not a good mix.”

Edited by James Rubin