Why Pantera Capital Is Betting on Solana’s Overtaking Ethereum

Pantera Capital bets on Solana, citing its potential to overtake Ethereum in market cap as it attracts more users.

Panther walking quietly on Solana's blockchain space.
Created by Kornelija Poderskytė from DailyCoin
  • Pantera Capital endorses Solana over Ethereum.
  • Solana’s unique architecture supports faster, cheaper transactions.
  • Pantera invests heavily in Solana tokens from the FTX auction.

Ever since its launch in 2015, Ethereum has been the biggest smart-contract-enabled blockchain, and the second largest crypto ever, trailing only behind Bitcoin. However, competition from efficiency-focused blockchains is ramping up, potentially challenging Ethereum’s dominance. 

According to Pantera Capital, the most likely contender for Ethereum’s place is Solana. Its unique architecture makes it scalable, and recent rapid user growth further boosts its case. 

Why Pantera Capital Bets on Solana

Pantera Capital, a prominent crypto venture capital firm, released an analysis of the latest trends in crypto, including Solana. The report, published on Tuesday, June 18, also has a section on Solana, pushing a bullish case for the token. Notably, the firm likened Solana’s emergence and challenge to Ethereum to Apple’s disruption of Microsoft in its early days. 

Sponsored

According to the report, Solana’s monolithic architecture optimizes every component of its blockchain, enabling faster and cheaper transactions compared to Ethereum’s modular structure. It also enables rapid innovation, making Solana more attractive to developers. Its architecture also offers a better user experience, without bridging multiple chains. 

These factors have contributed to the significant growth of the Solana network. For instance, unique active addresses on Solana went from 14,000 in October 2020 to nearly 1.34 million by mid-2024. Moreover, Solana accounted for 85% of all new tokens appearing on decentralized exchanges (DEXs) by May 2024. 

Pantera Bought Over $250M in Solana from FTX 

These figures have arguably contributed to Pantera Capital’s decision to make substantial investments in Solana. In May 2024, the company targeted a $250 million investment in SOL from the bankrupt FTX exchange. 

Sponsored

FTX had a close partnership with Solana, serving as one of its largest validators and holding one of the largest investments in the token. As a result, its collapse brought SOL crashing, as investors featured the effects of FTX dumping all its tokens. This brought SOL to a low of $9 in December 2022. 

Investments from firms like Pantera Capital, which bought locked tokens at a discount, contributed substantially to Solana’s eventual rebound. As a result, SOL is currently trading at $139.5

On the Flipside

  • In recent months, Solana has been struggling with downtime and transaction failures, which undermines its narrative as a scalable blockchain. 
  • Most recently, Solana has seen malicious validators taking advantage of users, profiting from sandwich attacks. 

Why This Matters

Pantera Capital has enough resources to influence the price of Solana significantly. Moreover, its analysis can influence other firms and traders, further boosting SOL. 

Read more about Pantera Capital’s investments in Solana: 
FTX’s SOL Found a Buyer? Pantera Capital Eyes $250M Tokens

Read more about Do Kwon’s political connections: 
Did Do Kwon Plan Montenegro Escape Before Terra-Luna Crash?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.