Unlocking the Secrets of Crypto: Solana and Ethereum’s Wild Ride! 🚀💰

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What to know:

Welcome, dear reader, to the whimsical world of Crypto for Advisors, CoinDesk’s weekly newsletter that unravels the mysteries of digital assets for financial advisors. Subscribe here to get it every Thursday, or risk missing out on the fun! 🎉

In today’s delightful edition, our very own Samantha Bohbot, partner and chief growth officer from RockawayX, takes us on a merry jaunt through the land of decentralized finance, where Bitcoin, Ethereum, and Solana frolic and play. 🐰💸

And then, like a wise old owl, Kevin Tam swoops in to answer your burning questions about institutional investment in crypto ETFs, while also pointing out some global trends in “Ask an Expert.” 🦉

– Sarah Morton

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Sectors Beyond Bitcoin: Ethereum, Solana and On-Chain Economies

Ah, Bitcoin! The granddaddy of crypto, hogging the limelight like a diva at a talent show. But wait! Today’s landscape is bursting with opportunities that would make even the most jaded investor sit up and take notice! 🌟

Beyond Bitcoin, blockchains are like magical playgrounds, powering applications that tickle the fancy of global users, generate heaps of cash, and grow faster than a weed in a garden! 🌱

Bringing Global Finance On-Chain

Tokenized real-world assets (RWAs) are the shiny new toys in the crypto sandbox, allowing the trading of traditional instruments like stocks, bonds, and even your grandma’s prized collection of spoons on blockchains. The perks? Oh, they’re as delightful as a chocolate cake! Instant trades, global participation (if the issuer lets you), and transparency that would make a glass house jealous! 🏠✨

Today, nearly $300 billion in tokenized assets are on-chain, and Boston Consulting Group predicts the market will balloon to $600 billion by year’s end and a whopping $19 trillion by 2030! Talk about a growth spurt! 📈

In this grand adventure of bridging traditional assets and on-chain use, blockchains are like bustling marketplaces, with the classic “chicken and egg” dilemma. Issuers want to go where the action is, and users flock to the latest and greatest products like moths to a flame! 🔥

Ethereum was the natural starting point, the birthplace of stablecoins like USDC and USDT, giving it the deepest pool of tokenized dollars and the lion’s share of today’s on-chain RWA value. 🦁💵

But wait! Solana is strutting its stuff as a top contender for RWA activity, with recent launches that showcase its potential to transform traditional markets faster than you can say “abracadabra!” 🪄 Kamino Finance, Solana’s leading borrowing and lending application, lets users borrow against their holdings in xStocks-tokenized stocks of Apple, Tesla, and other big shots. Since xStocks launched on June 30, Solana has been raking in an average of about 93% of daily trading volume. Talk about a power move! 💪

Solana’s dominance in global developer activity and active users (more than double that of the next chain) gives it a leg up in charming asset issuers, while onboarding them and unveiling new on-chain products will only add fuel to this roaring fire! 🔥

DeFi is on the rise, with a delightful array of on-chain products and institutional-grade offerings. Builders are whipping up products that mix stablecoins, RWAs, and yield mechanics to cater to all sorts of risk appetites. 🍰

Ethereum currently reigns supreme, with over $94 billion in total value locked (TVL) and thousands of protocols. While having the industry’s deepest liquidity is a feather in its cap, there’s more to DeFi than just TVL! 🎩

Solana’s DeFi protocol’s total value locked (TVL) has recently surpassed approximately $10 billion. And in a sign that the TVL reflects real and valuable use, Solana’s applications collectively earn more on-chain fee revenue than all other chains combined! Thanks to its speed and low costs, Solana has established itself as DeFi’s bustling trading hub, consistently leading Ether in decentralized exchange (DEX) trading volumes. 🏆

Beyond Bitcoin’s role as “digital gold,” both Ethereum and Solana have emerged as the backbone of digital infrastructure, each with its own unique flair. 💃

Ethereum is the original open computer, where builders first coded decentralized applications and launched foundational institutional projects. 🖥️

Solana’s DeFi momentum is building like a snowball rolling downhill. It’s already the most used chain in the world and a hotbed for innovative DeFi products. Like Ethereum’s native ETH token, Solana’s SOL offers broad exposure to the ecosystem, meaning investors don’t need to pick individual application winners; they can just hop on the growth train! 🚂💨

Ethereum and Solana’s long-term success hinges on their ability to host applications that deliver real value and, ultimately, shake up the old financial systems. If they can pull that off, today’s prices might just look like golden tickets! 🎟️

– 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. This quarter’s 13F filings reveal that Montreal-based Trans-Canada Capital has made notable investments in digital assets. It manages the pension assets for Air Canada, one of the largest corporate pension plans in the country. The pension fund added a whopping $55 million in a spot bitcoin ETF. Cha-ching! 💰

Institutional adoption of bitcoin has accelerated over the past year, driven by clearer regulatory guidance, the launch of spot ETFs, and increasing recognition of bitcoin as a strategic asset. Schedule 1 banks in Canada are holding more than $139 million in bitcoin exchange-traded funds, underscoring growing institutional demand and long-term positioning. 📊

Q. How might institutional accumulation affect bitcoin’s market dynamics?

A. Last year, ETFs gobbled up approximately 500,000 bitcoin, while the network produced 164,250 new bitcoin through its proof-of-work consensus. This means ETF demand alone was three times the newly minted supply! And let’s not forget, public and private corporations purchased 250,000 bitcoins. As governments consider including bitcoin in their strategic reserves, other entities are exploring adding bitcoin to their corporate treasuries. It’s a bitcoin buffet! 🍽️

Q. How will the Financial Conduct Authority (FCA) greenlighting retail access to crypto ETNs in the U.K. accelerate the retail & institutional adoption?

A. This marks a pivotal moment for crypto products in the retail market, reflecting a broader shift in the U.K.’s regulatory stance toward digital assets. It’s a complete turnaround from a 2020 decision when the FCA banned crypto exchange-traded notes. ETNs will need to be traded on an FCA-approved investment exchange. The U.K. is shifting its approach to crypto as the government seeks to grow the economy and support a digital assets industry, sending a strong signal to institutional investors that the U.K. is positioning itself as a serious player in the global crypto market. Watch out, world! 🌍

– Kevin Tam, digital asset research specialist

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2025-08-28 18:20