Multicoin's Kyle Samani Explains Why SOL-Based ETF Could Outperform ETH
Samani claims that Solana generates significantly more fees with a significantly smaller market cap compared to Ethereum.
Danny Nelson | Edited by Nikhilesh De , 18 Mar 2025 16:44 UTC
Important points:
- Multicoin Capital's Kyle Samani believes that a Solana-based ETF could perform better than similar Ethereum-based products due to the fees Solana generates and its low market cap.
- Samani is a significant investor in SOL and could benefit from a successful ETF launch.
While Solana doesn't have an ETF yet, one of its biggest backers suggests the Wall Street-focused vehicle could launch in 2025 and is confident it has a good chance of outperforming various similar Ethereum products.
Multicoin Capital's Kyle Samani, a major investor in SOL and many related protocols, has been vocal in calling for the SEC to support a SOL ETF. So his bullish predictions shouldn't come as a surprise.
But at Blockworks' Digital Asset Summit in New York on Tuesday, Samani laid out his case for why Solana is more attractive to traditional investors than Ethereum. It's all about finances: the fees generated on-chain versus the overall value of the asset.
“One of the main reasons why the ETH ETF didn’t get much interest was that a lot of investors were looking at ETH and asking, ‘Where are the fees?’” Samani said.
According to him, they did not find sufficient arguments to justify investing at high prices.
Stock traders often analyze a company’s price-to-earnings ratio to determine whether it is overvalued or undervalued, in other words, when to invest. Cryptocurrency doesn’t have such a clear metric, but blockchains do have revenue and tokens that can be combined to achieve a similar result.
Samani believes that Solana’s theoretical P/E ratio is much more attractive from an investment perspective than Ethereum’s. His calculations at the event showed that Solana trades at a P/E that is 30-50 times its own, while Ethereum’s is closer to 1,000.
Solana's P/E ratio is “much more in line with high-growth tech stocks,” Samani said.
If this logic is correct, we can expect traditional investors to see more growth opportunities in Solana than in Ethereum and invest accordingly.
