3 Min WatchArticle26 Mar 2025

Solana vs. Bitcoin vs. Ethereum: How Do They Compare?

At a Glance

Solana, a blockchain platform, offers high-speed, low-cost transactions and supports various decentralized applications

The prices of SOL (the cryptocurrency built on the Solana blockchain) have been more volatile compared to bitcoin and ether, with realized volatility of around 80% over the past three months

As the crypto market continues to evolve, Solana is emerging as a formidable player. But what should every crypto investor know about the economics of Solana, and how does it differ from its more established counterparts?

Solana’s Price Performance Outshines Bitcoin and Ether

Solana helps to support the lending, borrowing and trading platforms of decentralized finance, non-fungible token marketplaces as well as gaming and Web3 apps. While Ethereum remains the dominant smart contract platform, Solana focuses on high-speed, low-cost transactions and real-time applications.

Bitcoin, by contrast, doesn’t have specific use cases beyond being a store of value and a unit of exchange. For most of the past year and a half, SOL prices outperformed those of bitcoin and ether. That said, all three sold off sharply in late February and early March with SOL leading the way down.

SOL prices have been much more volatile than bitcoin or ether, showing around an 80% realized volatility in the past three months. This makes SOL nearly twice as volatile as bitcoin and about one-third more volatile than ether.

The Correlation Between Cryptocurrencies

The one year rolling correlation of SOL is high with both ether and bitcoin at around +0.7. However, SOL is slightly less correlated to bitcoin and ether than they are to one another.

All three cryptocurrencies have been positively correlated to the Nasdaq-100. While they tend to rise and fall with technology stocks, their correlations aren’t all that high at around +0.4.

Understanding Key Differences

In some respects, SOL is very different from bitcoin and ether. It currently takes 112 trillion calculations for a computer to mint a new bitcoin and the Bitcoin blockchain can support only about seven transactions per second.

Ether is more efficient, requiring a proof of stake rather than a proof of work, and it can handle up to around 30,000 transactions per second.

Solana requires proof of history as well as proof of stake and is more than twice as fast as ether and nearly 10,000 times faster than bitcoin.

Another difference is that bitcoin has a hard limit of just 21 million coins. Ether is limited to 18 million coins per year whereas Solana’s money supply is growing at around 4.5% per year currently, with an ultimate target of about 1.5% annual supply growth.

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