You have two ways of quickly accessing a crypto’s value. The first method is to compare it to a fiat currency, which is usually USD. The alternative is to compare the value of a crypto coin against another digital currency. That ratio could be convenient when assessing a potential swap or when you want to know how your coin performs compared to another crypto.
The SOL/ETH ratio focuses on analyzing how the prices of these currencies move. If you want to buy Solana, this parameter shows how it performs against the most reputable altcoin in the market. The latest news shows that the SOL/ETH ratio reached an all-time high, but what does that mean for these two currencies? Here’s a detailed analysis of the recent and historical performance of the Solana/Ethereum pair.
Historical Performance of the SOL/ETH Ratio
Ethereum has a longer and richer history that goes back over a decade. Unlike that, Solana only entered the market in 2020. Over these several years, it has managed to earn a reputation as a reliable ETH replacement.
Solana was worth around $0.8 to $1 during the first half of 2020. As a result, the SOL/ETH ratio was only $0.005979 at that point. It took over a year for the initial huge jump, which occurred in September 2021. The ratio reached 0.05458, which was actually close to the current all-time high.
The following year, the SOL/ETH rate dropped, and 2022 wasn’t a good year for Solana. It experienced the consequences of the entire crypto industry under-performing. In December 2022, the ratio went down to 0.009217. Investors were significantly worried, with many predictors questioning whether Solana could even be a viable Ethereum alternative.
The developers kept working on improving the network, and 2023 brought improvement. In July 2023, the SOL/ETH ratio was 0.01346. It started showing positive signs, and in the last 12 months, there were more increasing than decreasing periods.
Solana/Ethereum ratio ended 2023 with 0.04444. January 2024 started with a drop, but the ratio recovered to the end of the month. A big breakthrough occurred in March, which is when we saw the first all-time high set this year. After it reached the 0.05 ratio, SOL/ETH kept similar values for a few months. It shortly dropped in June but successfully recovered. As you can see, the historical trends varied, but the last 12 months showed a generally positive pattern.
Analysis of the Recent ATH
Source: Pexels
The crypto market has been volatile for a couple of months, and that brought some interesting events regarding the SOL/ETH ratio. According to reports, a new all-time high occurred on August 5th, 2024. A new ATH is now 0.0595.
At the beginning of the month, there was a huge crypto sell-off, which led to most currencies losing value. Ethereum dropped by 22%, while Solana lost 36%. SOL managed to bounce back quickly, leading to a new ATH ratio.
If we analyze the recent movements, we see that this ratio remained at a relatively similar level throughout August. Here’s a quick overview of last week:
- August 28th — 0.05902 (-0.96%)
- August 27th — 0.05959 (+1.70%)
- August 26th — 0.05860 (+1.19%)
- August 25th — 0.05791 (-0.56%)
- August 24th — 0.05823 (+5.13%)
- August 23rd — 0.05539 (+1.47%)
What do the above numbers tell us? For starters, there hasn’t been a huge change at the 24-hour level. The largest adjustment was between August 23rd and the next day, when the ratio gained over 5%. It’s more realistic that the SOL/ETH rate will remain at the current level, with only a daily change of 1-2%.
Another thing that we note is that the SOL/ETH ratio shows that it’s capable of remaining around the ATH. On August 27th, the rate actually raised the bar a bit higher. We have heard the question, “Is Solana finally Ethereum killer potential?” in the last few days. For years, experts have considered Solana to be the network that could outperform Ethereum. The latest SOL/ETH ratio shows that the blockchain could be on the right path. However, it also cautions that there’s a long way to go because there’s still a significant price difference between the two coins.
How Recent ATH Can Influence Future Altcoin Performance
The crypto market is hard to predict, but one thing has remained constant. Ethereum is the most valuable altcoin, and it is positioned right behind BTC in the industry rankings. ETH has been holding that spot for over ten years, with its value reaching a maximum of $4,891.70.
It’s an incredible success for a single altcoin to keep that position, so it’s no wonder the pressure on ETH increases each day. Many networks are trying to offer a similar blockchain but with better performance. That includes faster transaction processing and better scalability, which are exactly Solana’s targets.
Although some might see it as slow progress, Solana’s rankings show that it’s on the right track. It gained 621% of its value in the last 12 months. That’s considerably more than ETH, which gained only 51.50%. However, it’s important to assess that Solana has more potential and room to grow, so you can’t just observe simple digits here. After all, a single ETH coin is worth $2,470, compared to SOL, which is now around $145. Even with four to five times more SOL coins in circulation, that’s still a considerable difference.
As for future performance, both altcoins seem a promising choice. If the crypto market remains this attractive, it’s hard to imagine Ethereum will give up its position. The developers are working hard to improve the network, and the news that we can now trade Ethereum ETFs can also contribute to the chain’s popularity.
Solana could be the next big crypto hit. It already has 2,500 developers in its ecosystem, with 30+ million daily transactions. A new token standard, core updates, and other upgrades will only make the network more versatile. You can use the SOL/ETH ratio to see how the coin performs compared to Ethereum. However, don’t forget other relevant factors and tools when choosing the right investment.