Solana's Future Valuation Tied to U.S. Presidential Election: Trump Could Boost Crypto Regulations, Analysts Say

Solana (SOL) seems overvalued when you compare it to Ethereum (ETH). But here's the twist: how each token performs against Bitcoin (BTC) really hinges on who becomes the next U.S. president. This insight comes from a recent report by Standard Chartered Bank.

Led by Geoff Kendrick, the global head of digital assets research, the analysts believe that if Donald Trump wins, we could see more friendly crypto regulations. This might also increase the chances of getting spot-based Solana ETFs approved. On the flip side, a Kamala Harris administration could put pressure on smaller, riskier cryptocurrencies.

The analysts predict that under Trump, SOL could shine the brightest among the three, followed by ETH and then BTC. If Harris leads, the order flips. BTC would take the lead, with ETH next, and SOL trailing behind.

Despite the election outcome, the analysts remain optimistic about crypto. They forecast ETH could hit $7,000 by the end of 2025 if Harris wins, and even reach $10,000 if Trump is elected. Previously, they set a target of $14,000 for ETH by the end of 2025.

As for Bitcoin, it could soar to $200,000 in the same period, regardless of who wins the election.

Now, let's talk about Solana. Many view it as overvalued compared to ETH. While Ethereum is still the go-to layer-1 network for blockchain applications, Solana's rising blockchain activity and the rapid price increase of SOL have some crypto enthusiasts thinking it might be time for a leadership change.

Standard Chartered's analysts pointed out several metrics showing that SOL is indeed overvalued against ETH. For instance, SOL's market capitalization to network fee revenue ratio is 250, which is more than double ETH's ratio of 121. Additionally, Solana's supply grows by about 5.5% annually, while Ethereum's inflation rate is around 0.5% per year. This means SOL's real staking yield is 1%, while ETH's is 2.3%. Also, 38% of experienced developers in the blockchain space work on Ethereum, compared to just 9% for Solana.

Kendrick remarked, "SOL valuation metrics suggest the market is pricing in a very bright growth future for Solana, with a 100-400x increase in throughput expected." He added that such valuations would be easier to justify if Trump is in office rather than Harris.

To maintain its current valuation, Solana needs to dominate in high-traffic crypto sectors like finance, consumer applications, and decentralized physical infrastructure (DePIN). It also needs to activate the Firedancer client to boost efficiency, as noted in the report.