Fidelity Digital Assets, a subsidiary of global financial services company Fidelity Investments, has released a new record paper titled “2025 Look Ahead: Is It 'Too Late' To Get Into Digital Assets?” The publication pays particular attention to the ongoing competition between Ethereum and Solana. Written by Max Wadington, the “Ethereum Outlook” section takes a close look at key metrics, upcoming network upgrades, and the broader implications for investors heading into 2025.
Solana Vs. Ethereum in 2025
In a separate section comparing Solana to Ethereum, Wadington explains: “We believe fundamentals are more important to long-term investors. With that said, Ethereum has strong developer activity, total value locked (TVL), and stablecoin supply. In contrast, Solana and TVL revenues are improving at a faster rate than Ethereum and seem to have captured a large community mind share this year.”
One factor complicating Solana's growth trajectory is its source of revenue, which is heavily influenced by trading on memecoin exchanges. Wadington notes that while “a similar argument could be made for Ethereum Uniswap's primary use case,” Ethereum's fundamentals are “a little less dependent on speculation and may not be as volatile in the long-term.” Therefore, no platform is risk-free, but Ether's wider utility may give it more stability in bear markets.
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Despite this, short-term statements and technical milestones could influence the market sentiment in favor of Solana in 2025. In particular, Solana is due. Quick update on Firedancer level “promises a significant increase in transactions per second (TPS), which could directly add to Solana's value proposition.” Meanwhile, Ethereum's Prague/Electra upgrade is expected to generate “less community hype because it will have a significant impact on ether's value proposition.”
Another major difference is the presence of Ethereum in it US based spot exchange traded funds (ETFs), access channel that helps drive institutional demand and sales. However, Wadington clarifies that this advantage “could disappear at some point under the Trump administration,” pending regulatory developments that could “consolidate or remove Ether's advantage in this area completely.”
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Ultimately, Wadington suggests that fundamentals could reconfirm hype as the market progresses: “While Solana appears to have more short-term tails than Ether, it could his relative performance gave ethereal upside, similar to how Solana's previous underperformance gave him substantial runway. continues to 2024. As prices expand throughout this bull market, investors are likely to focus more and more on fundamentals, which could lead them back to ether.”
Has Ethereum taken a wrong step?
Turning specifically to Ethereum, the paper examines ongoing debates about Ethereum's rollup-centric roadmap. In Wadington's words: “The rollup-centric roadmap was designed to scale Ethereum while keeping the Layer 1 blockchain easy to run. However, since the Deneb-Cancun upgrade, this decision has been debated as Tier 1 fees have fallen.”
While lower fees may have a negative impact on direct income for Ether holders, Fidelity's position is that the long-term benefits outweigh the short-term income drop -time. Wadington reiterates: “We still believe that revenue from the blob market is unlikely to offset the significant reduction in revenue created by the previous renewal in the short term , but it still has positive long-term benefits through better network effects. “
In this view, the Ethereum ecosystem benefits from a cooperative relationship with Layer 2s, which owns the security and liquidity of Ethereum. The foundation's priority, as Wadington writes, is ensuring that “fees are close to zero to keep Layer 2 within the Ethereum ecosystem.” This could foster more specialized Tier 2 projects in 2025, as developers customize entire technical stacks for specific use cases such as the Ethereum Name Service (ENS).
At press time, Solana was trading at $197.
Featured image created by DALL.E, a chart from TradingView.com
