Standard Chartered: The Bull Case For Solana | Geoff Kendrick
🎯 Summary
Standard Chartered: The Bull Case For Solana | Geoff Kendrick - Podcast Summary
This 49-minute episode features Jack Cubanek interviewing Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, focusing on the bank’s first-ever price forecast for Solana (SOL). The discussion moves beyond Bitcoin and Ethereum coverage to analyze Solana’s valuation methodology, its current reliance on meme coin activity, and its potential transition to broader, high-throughput applications.
1. Focus Area: The primary focus is the valuation and future trajectory of the Solana Layer-1 blockchain. Key themes include:
- Methodology for valuing L1 tokens beyond immediate hype.
- The role and sustainability of meme coin-driven transaction volume.
- Identifying the next major use cases (social, tokenized equities) that could replace meme coin activity.
- Comparing Solana’s on-chain activity metrics against peers like Ethereum.
2. Key Technical Insights:
- GDP Metric for Valuation: Kendrick champions using “GDP” (Total Fees Paid to Applications) as the most comparable metric for valuing L1s, arguing it allows for more consistent, “apples-to-apples” comparisons across chains (like comparing P/E ratios in equities).
- Discounting Meme Coin Activity: Markets appear to be heavily discounting Solana’s current activity, suggesting a lower probability assigned to the sustainability of its current meme coin-driven fee structure compared to chains with more diversified usage (like Ethereum).
- Application vs. L1 Value Capture: There is an acknowledgment that historically, L1s capture most of the market cap value, but in the long term, as applications mature (e.g., Uniswap), value capture should shift to the applications themselves, potentially reducing L1 premiums.
3. Market/Investment Angle:
- Price Forecast: Standard Chartered projects SOL to reach $275 by the end of 2025 and $500 by the end of 2029 (Base Case).
- Bull Case: A massive acceleration in non-meme coin activity, such as tokenized equities or successful social applications, replacing meme coin volume could push the price significantly higher (e.g., $450 in the near term).
- Bear Case: If meme coin activity collapses without a viable replacement, Solana could be viewed as a “one-trick pony,” leading to price stagnation or decline, though Kendrick views this as low probability.
- Current State: The market is currently in a “bridge” phase where high meme coin activity has subsided from peak highs, and the market awaits the next wave of sustainable use cases.
4. Notable Companies/People:
- Geoff Kendrick (Standard Chartered): The analyst providing the valuation framework and price targets.
- Solana (SOL): The primary asset under review, noted for its high throughput and low transaction costs.
- Ethereum (ETH): Used as a primary comparison point for valuation metrics and application diversity.
- pump.fun & Radium: Mentioned as key platforms driving Solana’s meme coin trading activity.
- Ledger: The episode sponsor, highlighted for securing SOL and SPL tokens via hardware wallets.
5. Regulatory/Policy Discussion:
- No direct, in-depth regulatory discussion occurred, though the conversation touched upon the potential for tokenized equities to gain traction, which would inherently involve significant regulatory oversight in traditional finance (TradFi).
6. Future Implications: The conversation suggests the industry is heading toward a point where L1s must prove utility beyond speculative trading. Solana’s future success hinges on its ability to attract high-volume, low-transaction-size financial services (like tokenized equities for global retail access) or successful social applications to create a durable economic moat against competitors. Solana must make its shared global state highly appealing to prevent breakout applications from migrating to their own L2s or L1s to capture greater value.
7. Target Audience: This episode is most valuable for Crypto Investors, Institutional Analysts, and Blockchain Strategists focused on Layer-1 tokenomics, comparative blockchain valuation, and the long-term utility drivers for high-speed networks.
🏢 Companies Mentioned
đź’¬ Key Insights
"So everyone's heard of Bitcoin, like every person on the street, and every person that works in a bank has heard of Ethereum, and then like 5% of those in banks have heard of Solana because they've been trading at PA, that's stuff."
"There could be a lucky win as well for Ethereum that could come at the same time, which is the only use case that is existing from the real world in crypto so far, which is stablecoins, like in scale... I think once you get legislation change in the US, the GENS Act or the Stable Act, whichever one comes through... Ethereum continues to dominate in stablecoins, it continues to dominate in tokenized real-world assets for now, like in scale."
"So Solana is in this space, which is what is the chain actually for? What's it about? And in a relative sense, that feels more tricky for me for the next two or three years than even the Ethereum story..."
"Dencun upgraded much last year, which gave power to the Layer 2s. And actually even just the Picture upgrade, which at the margin gave even more power to the Layer 2s by increasing blob space. So there's a multi-year value capture problem, which feeds back to your point before about fees mattering, which I think has been mismanaged by Ethereum."
"For Bitcoin, I think that it's going to keep going up mostly on inflows from TradFi... by the time Trump leaves office, assuming he does leave office in January 2029, I think we're at $500K for Bitcoin."
"It's sort of, it feels a bit circular to me, right? So you have, as in most technologies, you have the application, sorry, the layer one gets built, then applications get built on top. Their value was enabled by the layer one, but then when applications get large enough, they kind of create all the value in the ecosystem. And so then you get a little bit of a breakout down the track."