The market capitalization of Solana’s programmable blockchain token, Sol (SOL), could potentially surpass Ethereum’s ether (ETH) during the next bullish cycle, according to a crypto observer in December.

However, this week demonstrated the difficulty of such a feat: On Monday, ether’s price surged over 19%, adding $70 billion to its market cap, reaching a total of $439 billion, based on data from TradingView. This single-day gain is almost 90% of SOL’s total market value.

The surge was driven by renewed optimism about the approval of a spot ether exchange-traded fund (ETF) in the U.S. Analysts believe the gap between ether and competitors like SOL will widen in the coming months as a potential spot ETF could attract mainstream institutional investment. Currently, only bitcoin enjoys this advantage.

As of the latest data, ether is the second-largest digital asset globally, with a market cap of $453 billion, second only to bitcoin’s $1.38 trillion. In contrast, Sol ranks fifth with a market value of $82 billion.

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“The near-term outlook for ETH is incredibly bullish. Let’s not overcomplicate it,” Ilan Solot, co-head of digital assets at Marex Solutions, commented via email. “The ETF announcement is almost a black swan event for most investors. The market is significantly short or underweight ETH, much of its liquidity is locked in staking, and the macro backdrop is favorable.”

Since its inception in 2015, Ethereum has led the way as the world’s premier smart contract blockchain, supporting over 4,000 decentralized applications. It hosts key decentralized finance protocols like Uniswap and AAVE, and initiatives like BlackRock’s BUIDL tokenization. Additionally, Ethereum has never faced an outage like Solana has.

Nonetheless, there have been instances, particularly during bullish periods, when traders shifted to Solana to avoid Ethereum’s network congestion and high transaction costs. For example, Solana’s share of global trading volume on decentralized exchanges increased earlier this year during the meme coin frenzy, sparking discussions about SOL potentially overtaking ETH.

Given the speculation around the ETH ETF and recent price movements, such talks seem premature.

Source: tradingview.com

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