This edition of the Crypto for Advisors newsletter features Samantha Bohbot, partner and chief growth officer at RockawayX, providing insights into decentralized finance and the unique contributions of Bitcoin, Ethereum, and Solana to the sector.
Additionally, Kevin Tam addresses inquiries regarding institutional investments in crypto ETFs and highlights some global trends in the “Ask an Expert” section.
– Sarah Morton
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Sectors Beyond Bitcoin: Ethereum, Solana and On-Chain Economies
While Bitcoin remains at the forefront of the crypto discussion as the leading digital asset, the current landscape offers numerous enticing opportunities for investors.
Apart from Bitcoin, various blockchains are driving applications that engage global users, generate significant revenues, and demonstrate impressive growth.
Bringing Global Finance On-Chain
Tokenized real-world assets (RWAs) signify the issuance and trading of traditional instruments like stocks, bonds, commodities, and alternative assets on blockchains. The advantages of this approach are considerable: asset trades can be settled almost instantly; participation is open to anyone, anywhere (with issuer permission); and the transactions are transparent, which enhances tracking and automation.
Currently, nearly $300 billion in tokenized assets exist on-chain. Boston Consulting Group forecasts that the market will reach $600 billion by the year-end and potentially $19 trillion by 2030. Recent deployments of RWAs illustrate how blockchains can revolutionize traditional markets.
By connecting traditional assets with on-chain applications, blockchains function as marketplaces, often experiencing the classic “chicken and egg” challenge. Specifically, issuers seek platforms with active users, while users are drawn to locations offering the latest and greatest products.
Ethereum has emerged as the logical starting point. It was here that stablecoins like USDC and USDT were initially introduced, resulting in Ethereum accumulating the largest share of tokenized dollars and the majority of the current RWA value on-chain.
Solana is also a key contender for RWA activities, with recent developments showcasing its potential to rapidly transform traditional markets. Kamino Finance, Solana’s leading borrowing and lending platform, allows users to effortlessly borrow against their holdings in xStocks, which are tokenized shares of companies like Apple and Tesla. Since the launch of xStocks across blockchains on June 30, Solana has pulled in an average of roughly 93% of daily trading volume.
On-chain stock token volume by blockchain | Source: Dune Analytics
Solana’s predominance in global developer activity and active users (more than double that of the next chain) grants it an advantage in attracting asset issuers, while effectively onboarding them and launching new on-chain products will further strengthen this engagement.
Broader trends indicate ongoing DeFi expansion, with increasing diversity in on-chain products and institutional-grade offerings. Creators are developing products that integrate stablecoins, RWAs, and/or yield mechanics to cater to varying risk preferences.
Ethereum currently leads this sector, with over $94 billion in total value locked (TVL) and a multitude of protocols. While possessing the deepest liquidity in the industry is a significant advantage, there is more to DeFi than just TVL.
The Solana DeFi protocol has recently surpassed approximately $10 billion in TVL. This signals that the TVL reflects genuine and valuable usage, as Solana’s applications collectively generate more on-chain fee revenue than all other blockchains combined. Due to its speed and low fees, Solana has established itself as a hub for DeFi trading and consistently outpaces Ethereum in decentralized exchange (DEX) trading volumes.
Beyond Bitcoin’s role as “digital gold,” the Ethereum and Solana blockchains are becoming essential digital infrastructures, each with specific strengths.
Ethereum is known as the original open computing platform, where developers first created decentralized applications and foundational institutional projects emerged.
Solana’s DeFi momentum is gaining traction. It is already the most utilized chain worldwide and a hotspot for cutting-edge DeFi innovations. Similar to Ethereum’s native ETH token, Solana’s SOL provides broad access to the ecosystem, allowing investors to participate in overall growth without needing to identify individual application successes.
The long-term viability of Ethereum and Solana hinges on their ability to host applications that offer real value and ultimately disrupt conventional financial systems. If accomplished, today’s prices may represent attractive entry points.
– Samantha Bohbot, partner and chief growth officer, RockawayX
Ask an Expert
Q. One year into the institutional investments in the crypto ETFs trend, how are Canadian banks and pension funds approaching bitcoin?
A. Recent 13F filings indicate that Montreal-based Trans-Canada Capital has made significant investments in digital assets, managing Air Canada’s pension assets, one of the largest corporate pension plans in the country. The fund has allocated $55 million to a spot bitcoin ETF.
The institutional embrace of bitcoin has surged over the past year, fueled by clearer regulatory guidance, the advent of spot ETFs, and increasing recognition of bitcoin as a strategic asset. Schedule 1 banks in Canada hold more than $139 million in bitcoin exchange-traded funds, highlighting rising institutional interest and long-term positioning.
Q. How might institutional accumulation affect bitcoin’s market dynamics?
A. Over the past year, ETFs have acquired around 500,000 bitcoins, whereas the network produced only 164,250 new bitcoins through its proof-of-work consensus. This indicates that ETF demand alone has surpassed the newly minted supply by three times. Additionally, public and private corporations have added 250,000 bitcoins to their portfolios. As more governments consider incorporating bitcoin into their strategic reserves, other organizations are investigating the inclusion of bitcoin in their corporate treasury strategies.
Q. How will the Financial Conduct Authority (FCA) greenlighting retail access to crypto ETNs in the U.K. accelerate retail & institutional adoption?
A. This represents a significant development for crypto products in the retail market and reflects a broader change in the U.K.’s regulatory standpoint on digital assets. It marks a complete turnaround from a 2020 ruling where the FCA banned crypto exchange-traded notes. ETNs must be traded on an investment exchange authorized by the FCA. The U.K.’s evolving approach to crypto aims to bolster economic growth and foster a digital asset industry, signaling to institutional investors that it is positioning itself as a competitive player in the global crypto landscape.
– Kevin Tam, digital asset research specialist
