Solana and the Potential ETF

Solana currently lacks an exchange-traded fund (ETF), yet a prominent supporter anticipates that this vehicle could debut in 2025, suggesting it may outperform Ethereum’s similar offerings.

Kyle Samani from Multicoin Capital, a key investor in SOL and related protocols, has been advocating for the SEC to favor a SOL ETF. His optimistic stance isn’t surprising.

During Blockworks’ Digital Asset Summit in New York City, Samani elaborated on why Solana is better positioned to attract traditional investors compared to Ethereum. His argument centers around the fees generated on-chain relative to the asset’s total value.

Samani stated, “A lot of the reason why the ETH ETF didn’t have a super strong reception was a lot of investors looked at ETH and said ‘show me the fees.'”

He suggests investors found insufficient evidence to justify ETH’s high prices. While stock traders often use price-to-earnings ratios to gauge a company’s valuation, the crypto market lacks a similar clean metric. However, blockchain revenues and tokens can be combined for comparative insights.

Samani claims that Solana’s theoretical P/E ratio is significantly more attractive for investors than Ethereum’s. He provided calculations indicating Solana trades at 30 to 50 times its P/E, while Ethereum is around 1,000 times.

He concluded that Solana’s P/E ratio aligns better with high-growth tech stocks. If this reasoning holds, traditional investors might see greater potential in Solana than Ethereum and act accordingly.