Solana flips XRP once more, closes in on Ethereum

Now that Solana is once again worth more than Ripple, diehards might wonder whether it could really topple Ethereum


Solana’s native asset SOL flipped XRP this morning to again become the fifth-largest cryptocurrency by market cap.

After gaining more than 700% since its market bottomed out at the end of last year, SOL is now valued at nearly $34 billion. XRP and SOL trail only binance coin (BNB), tether (USDT), ether (ETH) and bitcoin (BTC).

This makes SOL one of the best performing top-100 cryptocurrencies of 2023. XRP, meanwhile, has only made about 80% — about the same as ether — but both have underperformed against bitcoin this year.

XRP must still deal with a jury trial in Ripple’s long-running US Securities and Exchange Commission saga. A federal court in July found the firm’s programmatic sales to retail investors through crypto exchanges and other platforms didn’t amount to securities, while direct sales to institutional investors did. 

Read more: Judge rules in SEC case vs Ripple

The trial, set for next spring, should finally determine to what extent Ripple Labs is culpable for flouting US securities laws, after the SEC dropped its charges against Ripple executives Brad Garlinghouse and Chris Larsen in October. A settlement in the meantime is still possible.

While Solana spent most of the third quarter of 2021 — peak bull market — ahead of XRP and a top-five coin behind tether, its more recent overperformance can in part be explained by how severely it crashed around the FTX debacle last November

Click play to watch Solana recover from its crash last year

Sam Bankman-Fried was invested heavily in projects across the Solana space, including SOL itself, and the crypto crashed by nearly two-thirds in three days when the market lost faith in cryptocurrencies orbiting the FTX co-founder. BTC and ETH meanwhile took only a 20% hit. 

Solana was a top-10 token before FTX’s downfall, worth about half as much as XRP. In the months after, Solana ranked at the tail end of the top 20, behind polkadot (DOT), tron (TRX) and memecoin shiba inu (SHIB). 

Never underestimate the power of dog coins

Solana has been busy catching up all year, propelled in part by a commitment from its developers to shake the network’s association with Bankman-Fried, whose entities still hold claim to nearly $2 billion in SOL at current prices to be unlocked over the next few years.

The network boasts much of the same utility as smart contract-enabled blockchains like Ethereum, Tron, Avalanche and BNB Chain, albeit with its own unique brand of consensus, technology and tokenomics developed by San Francisco-based Solana Labs.

Apps and tokens run atop Solana, including decentralized exchanges, lending protocols and NFT marketplaces. 

Solana’s overall dominance, which measures how much of the entire market is SOL, is at 2.13%, 0.6 percentage points lower than its November 2021 record.

Hype around new Solana-centric projects has helped inspire a certain Solanaissance. BONK, the network’s resident dog coin, has seen its price multiply 100 times over the past two months — even after a healthy 50% correction this week. 

Read more: BONK’s price pumped harder around Coinbase listing than any other crypto this year

BONK mania even led to significant markups for Solana-branded smartphones upon realization that each one had been preloaded with 30 million BONK ($550) — about the same as the retail value of the device.

Elsewhere, the liquid staking protocol Jito airdropped $165 million worth of its new token, JTO, to its users earlier this month. Traders pushed the price of JTO higher following the distribution, with the whole process adding about $300 million in market value to the Solana ecosystem. 

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BONK and Jito are combining forces to seed Solana users with Christmas cheer

The anticipation of further airdrops scaled to Solana activity has since helped drive on-chain volumes to yearly highs.

Solana’s total value locked (TVL) across its network is also up, now at $1 billion compared to $300 million in September. 

Although, that jump is mostly attributed to the rising price of SOL; there’s currently 14 million SOL locked on the network right now, one-third less than the 21 million SOL staked at the start of the year, and 25% less than in September.

Solana almost closer than ever to flipping Ethereum 

In any case, now that SOL seems set to stay ahead of XRP, some might wonder how far away it is from eclipsing BNB. The token is the native asset for Binance’s blockchain network BNB Chain, and Binance users can also use it to cover trading fees and participation in initial coin offerings and the like. 

BNB faces its own set of challenges due to Binance’s run-in with US regulators, which has resulted in mammoth fines, a years-long financial surveillance mandate and the exit of co-founder Changpeng Zhao as CEO. 

Read more: Binance says the SEC can’t use DOJ plea deals as proof of guilt

Turns out, outside of the last bull market’s peak in late 2021, solana has never been closer to flipping BNB in their shared history. BNB’s market cap is now just 20% more than SOL’s, down drastically from 300% higher only three months ago.

The gap between Solana and Ethereum is still a long way off completely closing

Solana’s hopes of flipping Ethereum seem far less realistic right now. But there is progress: Ethereum’s market value is now about 700% more than Solana’s, its lowest point since peak bull market in 2021. 

ETH was worth nearly 40 times more than Solana at the start of the year.

SOL would still need to hit a price equal to more than twice its current all-time high, multiplying eight times to $625, to reach ETH’s current valuation. Ethereum, of course, would have to stagnate the entire time.

So, if Solana flipping Ethereum were to happen at all, it would likely take multiple bull and bear cycles for Solana to properly narrow the gap.

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