3 Reasons to Sell Ethereum and Cardano Today and Buy Solana Instead

The second-largest cryptocurrency, Ethereum (CRYPTO: ETH), and the smaller chain originally designed to outcompete it, Cardano (CRYPTO: ADA), have both been decent investments for many people. And they could well continue to be, given their positions in the steadily expanding crypto sector.

But neither of those two are perfect, and it's actually more likely that Solana (CRYPTO: SOL) will outperform both of them over the long term. So here are three reasons it might be a smart idea to sell Cardano and Ethereum and buy Solana instead.

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1. It's faster and cheaper to operate on

As of Feb. 24, transactions on Ethereum cost about $0.90 to execute a swap from one token to another, and transactions close in roughly 31 seconds. When the network is under heavy load, gas (user) fees can spike as high as tens of dollars, with transaction times taking many tens of minutes or more.

On Cardano, transactions cost about $0.28 each, and they (at least preliminarily) settle after 20 seconds, with final settlement taking much longer due to the way the process works on the chain. The chain rarely gets enough load to incur higher user prices or longer transaction times. So overall it's somewhat successful in its core aims of being cheaper and faster than Ethereum on average.

But on Solana, transactions settle in around five seconds or less, and they cost somewhere between $0.02 and small fractions of a cent. Those are two significant drivers of the chain's adoption, as it's cheaper and faster than the major alternatives. That makes it less painful to do everything from decentralized finance (DeFi) processes to minting new non-fungible tokens (NFTs) or trading meme coins.

And that's part of what makes it a better investment than the other two.

2. The development cycle is much faster, and more organized, too

Ethereum's technology development cycle is notoriously out of step with the chain's problems. For instance, for years Ethereum has promised to lower gas fees and transaction times, yet they're still problems. And major changes, like the launch of the chain's 2.0 edition, have done little to fix that.

Cardano takes a different approach of being deliberate with its upgrade cycle, via a process of seeking consensus among developers and undergoing peer review of proposed changes. It also emphasizes consulting with academic literature to shape the chain's strategic direction, which keeps the pace fairly slow.

Contrast these two with Solana. Scarcely a quarter goes by without an incremental upgrade, and most years are characterized by one major advancement of the chain's core technology.

Solana's development strategy tends to be proactive with regard to emerging sectors in cryptocurrency, like artificial intelligence (AI), rather than being reactive. And that's what makes it a more appealing place to invest and to develop new projects and applications.

3. Volume trends today could predict prices tomorrow

Higher trading volumes on any given day don't mean much. But, when paired with other factors and examined over the course of years, there are a few things to appreciate that matter for investors when it comes to volume.

Ethereum's market cap of $300 billion is roughly four times larger than Solana's market cap of $70 billion. With all else being equal, its trading volume could thus be expected to be approximately four times more in a typical day. Cardano's market cap of $23 billion is about a third of Solana's. Via the same principle, it should have trading volume that's roughly a third, assuming investor interest in the chain is the same.

In practice, Solana's volume is often higher than Ethereum's in many 24-hour periods despite the coin's market cap being much smaller. And while Cardano does tend to exhibit the expected volume relative to its size, it absolutely never sees more transaction volume than Solana.

When a smaller chain posts more volume than a larger one, it's a sign that there's more activity going on. For Solana, that makes perfect sense because it's easier for investors and developers to make multiple transactions without paying a lot of gas fees or needing to wait a long time.

Eventually, Solana's volume could predict the outperformance of its price, and that's why it's worth betting on rather than Ethereum or Cardano.

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Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Cardano, Ethereum, and Solana. The Motley Fool has a disclosure policy.