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Fidelity Digital Assets, a subsidiary of global financial services firm Fidelity Investments, has released a new account paper Titled “2025 Look Ahead: Is It Too Late to Enter Digital Assets?” The publication devotes significant attention to the ongoing competition between Ethereum and Solana. The Ethereum Forecast section, authored by Max Waddington, provides a closer look at fundamental metrics, upcoming network upgrades, and broader implications for investors heading into 2025.
Solana vs. Ethereum in 2025
In a notable excerpt comparing Solana and Ethereum, Waddington explains: “We believe fundamentals are what matter most to long-term investors. However, Ethereum has strong developer activity, total value locked (TVL), and stablecoin supply. By comparison, Solana’s revenues are improving TVL is at a faster rate than Ethereum’s revenue and appears to have captured a significant share of the community in the past year.”
One factor complicating Solana’s growth trajectory is its revenue source, which is heavily influenced by memecoin trading. Waddington points out that while “a similar argument could be made for Ethereum’s main use case of Uniswap,” Ethereum’s fundamentals “are less speculative and may be less volatile over the long term.” Thus, neither platform is risk-free, but the broader benefit Ethereum may give it greater resilience in bear markets.
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However, short-term narratives and technical milestones could tip market sentiment in Solana’s favor in 2025. Specifically, Solana’s upcoming Firedancer upgrade promises a “significant increase in transactions per second (TPS), which could directly enhance the value proposition.” Solana’s. Meanwhile, “the Prague/Electra upgrade to Ethereum is expected to generate less buzz in the community as it does not significantly impact Ethereum’s value proposition.”
Another key difference is Ethereum’s presence in US-based exchange-traded funds (ETFs), an accessibility channel that helps drive institutional and retail demand. However, Waddington highlights that this advantage “may disappear at some point under the Trump administration,” pending regulatory developments “that could enhance Ethereum’s advantage in this area or remove it entirely.”
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Ultimately, Waddington notes that fundamentals may reassert themselves due to hype as the market advances: “Although Solana appears to have more short-term tailwinds than Ethereum, its relative performance could provide significant upside for Ether, similar to how Solana’s previous poor performance has provided a significant runway leading into 2024. As prices extend throughout this bull market, investors will likely increasingly focus on fundamentals, which could bring them back into ether.”
Did Ethereum make a mistake?
Turning specifically to Ethereum, the paper delves into the ongoing discussions around an Ethereum-centric roadmap. As Waddington puts it: “The pool-centric roadmap was designed to scale Ethereum while maintaining the ease of operating a layer-one blockchain. However, since the Deneb-Cancun upgrade, there has been controversy surrounding this decision as layer-one fees have decreased.”
While lower fees may seem detrimental to the immediate revenues of Ethereum holders, Fidelity’s position is that the long-term benefits outweigh the short-term revenue decline. Waddington reiterates: “We continue to believe that revenues from the blob market are unlikely to offset the significant revenue decline resulting from the previous upgrade in the short term, however they still carry positive long-term benefits through improved network effects.”
From this perspective, the Ethereum ecosystem benefits from a mutual relationship with the second layer, which inherits the security and liquidity of Ethereum. The foundation’s priority, Waddington wrote, is to ensure “near-zero fees to maintain layer 2 within the Ethereum ecosystem.” This could fuel more specialized Layer 2 projects in 2025, as developers dedicate entire technology stacks to specialized use cases such as Ethereum Name Service (ENS).
At press time, Solana was trading at $197.
Featured image created with DALL.E, a chart from TradingView.com