BitMEX founder Arthur Hayes believes Ethereum (ETH) is likely to outperform Solana (SOL) over the next leg of the cycle.
In a new interview on the Unchained podcast, Hayes says Ethereum has a higher risk-reward ratio compared to Solana going forward.
“If you have a fresh unit of fiat of capital, what do you do with it? Do you buy Solana or do you buy ETH right now given all the things that are happening? And so I would say ETH from a risk-reward perspective is better…
…whenever you have a turn in the cycle, you want to own the most hated thing because that’s going to perform the best. And you don’t want to own the most loved thing from the previous cycle because that’s going to perform the worst.
That’s not to say that Solana is not going to go up a lot. But relative to something else, is it going to perform as well? And so I think ETH has sort of the market fundamentals to do very well in this next leg up because people hate it so much.”
Hayes says that one of the factors limiting Solana’s upside potential is the fact that the narrative that powered Solana’s rally to a new all-time high in January is unlikely to reach similar heights of popularity.
“Solana did very well on sort of the memecoin supercycle, or whatever you want to call it, over the last 18-24 months.
But I think that, yes, there will be some meme coins that do well…
…but are we going to go back to where we were 12 months ago where everybody and their mother was just like slinging memecoins trying to find the $1 million market cap that goes to $100 million market cap and just handing hundreds of millions of dollars in fees to PumpFun?
I don’t think we’re going back there and so I think all that activity that was on Solana based on memecoin trading won’t be there. And so the narrative of, ‘oh, memecoin trading is amazing, the anti-Venture Capital way to participate in crypto is on Solana, therefore I need to own Solana as the layer-1 that hosted all that activity.’ I think that narrative goes away.”
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