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Investing.com -- Standard Chartered (LON:STAN) has begun coverage on Solana (SOL) with a year-end 2025 price target of $275, implying a gain of more than 50% from current levels around $175.
While the bank acknowledges that Solana is likely to underperform Ethereum over the next two to three years, it sees longer-term potential for the network once new sectors start to scale.
“Solana is a fast, cheap alternative to Ethereum; as a result, it has dominated memecoin trading,” said Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered, said, citing the network’s superior transaction throughput and reliability.
However, he notes that memecoin activity is “being discounted to a quantifiable degree by markets,” which has contributed to Solana trading “cheap” relative to its achieved application revenue, or “GDP.”
Most of Solana’s current usage is concentrated in trading applications, particularly decentralized exchanges that facilitate high-volume, low-value memecoin transactions. While this has helped stress-test the network’s capabilities, Kendrick warns that the associated revenues may be unsustainable.
“Solana trades ‘cheap’ on our market cap-to-GDP metric,” the analyst said, attributing this to a “more aggressive discount factor” being applied to future earnings compared to other chains.
“Put another way, Solana’s recent high fees and high activity on the back of memecoin trading may be seen as unsustainable,” Kendrick explained.
Looking ahead, Standard Chartered sees potential for Solana to dominate in emerging sectors like decentralized social media, high-throughput financial applications, and infrastructure platforms, though it expects these use cases to take two to three years to scale.
“The key to Solana’s future success will be to take its core advantage in transaction confirmation (fast, cheap and reliable) and apply it to something other than memecoin trading,” Kendrick continued.
Beyond the near-term challenges, the analyst forecasts SOL at $310 by end-2026 and $500 by end-2029. Standard Chartered’s year-end target for 2025 is $275.