Bitwise’s chief investment officer Matt Hougan shares his optimistic perspective on the layer-1 blockchain Solana, attributing it to two key elements that differentiate it from competitors like Ethereum.
“I love investments that offer me two avenues to succeed,” Hougan stated in a post on X on Thursday, clarifying that Solana (SOL) is betting on the expansion of the stablecoin and tokenization infrastructure market, and expects to “capture an increasing share of that market,” which he believes are promising bets.
“People significantly underestimate how swiftly and extensively these technologies will transform markets. I can easily envision this market expanding by 10 times or more,” Hougan elaborated.
“I’m quite positive about Ethereum and certain other blockchains. However, I believe Solana’s chances of securing a larger segment of this market are strong. It provides fast, user-friendly technology and is supported by a fantastic community with a rapid development mindset.”
Earlier this month, Hougan praised Solana, forecasting that this blockchain would emerge as the preferred network for stablecoins on Wall Street, while Bitwise CEO Hunter Horsley has also been promoting it, asserting that Solana could outpace Ethereum in the staking exchange-traded fund market due to its more investor-friendly design.
Solana is far from rivaling Ethereum for now
Ethereum continues to be the dominant player with a significant lead, possessing the largest stablecoin market capitalization exceeding $163 billion and a total locked value surpassing $85 billion, as reported by data aggregator DefiLlama.
In contrast, Solana’s stablecoin market capitalization is approximately $14.9 billion, with a total locked value of over $11.3 billion.
Nevertheless, Hougan noted that Tron, Solana, and BNB Smart Chain are among the “top contenders” for the title.
Solana is gaining ground with institutional interest
He also suggested that institutional interest in Solana is on the rise, highlighted by deals like that of financial services company Western Union, which has adopted the Solana blockchain for its stablecoin settlement system.
“It’s a newer asset playing catch-up against its peers in securing institutional mandates, but it is making progress,” Hougan remarked.
“If I’m correct, the blend of a growing market and an expanding market share will have explosive effects for Solana, similar to Bitcoin.”
Related: Can Solana rival Wall Street? Kyle Samani thinks so
Bitwise offers products linked to Solana, including its staking ETF which was launched on Tuesday.
Bitcoin also has two ways to win
In addition to Solana, Hougan mentioned that Bitcoin possesses two potential paths to success as well, through a “bet” that the global store of value market will expand, and Bitcoin (BTC) will capture an increasing share, which requires just one of these factors to “materialize for me to prosper.”
“A common error investors make is putting too much emphasis on Bitcoin securing market share and too little on the market’s growth. The global store of value market has seen a 10x increase over the past 20 years, escalating from under $3 trillion in 2005 to $27.5 trillion today.”
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