According to Glassnode cofounder Yann Allemann, capital rotation within the cryptocurrency market has begun.
Allemann has noted that Solana (SOL) is currently dominating Ethereum (ETH). His assessment comes after the former gained roughly 10% against the latter since May 27.
The SOL/ETH pair experienced a significant decline following the approval of several spot Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) earlier this month. On May 27, the price of Ethereum peaked at $3,973 on the Bitstamp exchange. However, the excitement surrounding the SEC's much-coveted nod quickly dissipated, with ETH shedding 7% in several days. The SEC is yet to approve S-1 registration statements for these ETFs to go live.
At the same time, Bitcoin's market dominance has collapsed more than 4% since May 6 after breaching the 56% mark.
Yuri MolchanOnce a certain cryptocurrency rallies, it tends to cool off, while traders take profits and place bets on other assets. Capital rotation within cryptocurrencies can also take place internally, meaning that the same cryptocurrency gets acquired at different prices.
Despite its recent weakness, Bitcoin is still neck-and-neck with Ethereum on a year-to-date basis. The two cryptocurrencies are up 77.71% and 79.38%, respectively.
Solana ETF?
After Bitcoin and Ethereum have benefited from the ETF hype, analysts are now eyeing other potential cryptocurrency contenders.
Vladislav SopovAs reported by U.Today, CNBC contributor Brian Kelly has predicted that Solana could end up being the next major digital asset to get its own ETF. This view is also shared by American financier Anthony Scaramucci and British bank Standard Chartered.
At the same time, the Chicago Mercantile Exchange (CME) recently shut down rumors about potentially launching Solana-based futures.
Yuri Molchan
Vladislav Sopov
Dan Burgin