Bitcoin and Ethereum are vying to seize DeFi liquidity from Solana, given the latter’s blockchain is rolling out new Layer 2 innovations. This week, Ethereum hit a 12-day peak, whereas Solana faced a notable liquidity drop amounting to $772 million.
The recent influx of meme coins has been overshadowed by notorious rug pulls and disputes involving the LIBRA and MELANIA tokens, further complicating Solana’s plight. Presently, Solana (SOL) is priced at $172.98, reflecting a decline of over 40% from its pinnacle of $295.83.
Ethereum’s value soared to a 12-day high of $2,849.50 this week, aligning with Solana’s liquidity downturn. Both networks have been closely rivalling in decentralised exchange (DEX) metrics since the inception of Pump.fun, a meme coin launchpad on Solana. Nevertheless, the recent scandals surrounding meme tokens have adversely affected the market capitalisation on the Solana blockchain.
After several months of lagging behind Ethereum, there are indications that Ethereum may be set for an upswing, as suggested by derivatives market analytics. The long/short ratio across derivatives exchanges has exceeded 1, indicating a bullish outlook among traders for Ether on Binance and OKX markets.
DeFi is an up-and-coming decentralized platform aimed at eliminating intermediaries and centralized organizations from financial dealings. DeFi encompasses digital currencies, blockchain innovation, and applications that empower individuals to engage in financial exchanges directly with one another.
While Bitcoin exchange-traded funds (ETFs) continue to lead the market, Ethereum ETFs have also observed a rise in institutional acceptance. According to “The Institutional Crypto Newsletter” by Coin Stack, institutional ownership of Ether has escalated quarter-over-quarter, with overall Ether ETF ownership increasing from 4.8% to 14.5%. Recent 13F filings reveal an upsurge in demand for Ethereum ETFs from institutional investors.
With the rollout of Layer 2 protocols on Bitcoin, the cryptocurrency is entering the fray for DeFi liquidity long associated with Ethereum. As Layer 2 innovations aim to enhance transaction efficiency on the Ethereum blockchain, a comparable ecosystem may emerge on Bitcoin.
Dom Harz, co-founder of BOB (“Build on Bitcoin”), reflected on the latest developments in the meme coin arena. He remarked,
“The widespread allure of meme coins is undeniable; however, following notable incidents, the excitement may be waning. The recent accusations of rug pulls concerning the $LIBRA token and other controversies might have significantly dampened the memecoin bull run.”
Harz further commented
, “Despite Ethereum’s lackluster performance in this cycle, it continues to be the chain of choice for creators, as opportunities draw in both developers and investors. With the imminent Pectra upgrade, there lies potential for a renewed interest in Ethereum as the memecoin phase comes to a close.”
He concluded by emphasizing the evolving landscape in crypto:
“The most thrilling advancements are unfolding on Bitcoin, with innovations like BitVM and Bitcoin DeFi gaining traction in 2025. The belief that investors must look beyond Bitcoin for DeFi prospects is swiftly changing as more builders and institutions focus on crypto’s most secure asset.