- Ethereum price is in an uptrend, however, analysts believe that layer-1 solutions could outperform the altcoin.
- Analysts have noted capital rotation from Bitcoin and Ethereum to MATIC, Solana and Terra.
- Solana, Terra and Avalanche have outperformed Ethereum, offering higher gains to investors since the beginning of 2021.
Analysts have noted a spike in capital inflow in layer-1 solutions Matic, Solana and Terra over the past two weeks. Proponents believe that tokens with high on-chain activity could outperform Ethereum before the end of 2021.
Analysts bet big on layer-1 solutions in Ethereum vs L1 debate
In a recent podcast on Uncommon Core, Su Zhu, the CEO and CIO of Three Arrows Capital and Hasu, a crypto researcher, discussed the two sides of the Ethereum vs. layer-1 debate.
Institutional investors and large-wallet traders have poured capital into MATIC, Solana and Terra. Solana’s market capitalization is more than double that of Avalanche and Terra. The increasing investor appetite for scalability solutions is evident from the total value locked and the on-chain activity on the networks.
The number of active addresses on MATIC and Solana has increased steadily over the last two months. @AltcoinSherpa, a pseudonymous cryptocurrency analyst, did a poll a few months ago. The results revealed that a vast majority of participants had an altcoin portfolio and zero Bitcoin holdings.
The analyst believes that layer-1 scaling solutions could continue to outperform Ethereum.
There appears to be confusion on what I’m saying: I’m not saying that ETH is going to dump; I actually think the ETHBTC chart looks pretty good. I’m saying that other L1s probably outperform ETH given the overall environment/evidence of 2021/current market trends.
— Altcoin Sherpa (@AltcoinSherpa) December 26, 2021
Terra’s LUNA is the 12th largest cryptocurrency, and proponents refer to it as ‘Alipay on the blockchain.’ @TraderMayne, a crypto analyst and YouTuber, has evaluated Terra’s price trend and predicted that the token could enter price discovery.
FXStreet analysts have evaluated the Solana price trend and predicted that the altcoin is primed to recover and target $330.