Bitwise's chief investment officer, Matt Hougan, has outlined two primary reasons for his optimistic outlook on the layer-1 blockchain Solana, positioning it favorably against competitors like Ethereum.
"I love investments that give me two ways to win," Hougan stated in an X post on Thursday. He explained that Solana (SOL) is making a strategic "bet" on the anticipated growth of the stablecoin and tokenization infrastructure market. Furthermore, he believes Solana will capture an increasing share of this expanding market, which he considers to be "good bets."
"I think people dramatically underestimate how much and how quickly these technologies will remake markets. It’s easy for me to imagine this market growing by 10x or more," Hougan added.
"I’m very bullish on Ethereum and select other blockchains. But I do like Solana’s odds of winning a larger share of this market. It offers fast, user-friendly technology, backed by a great community with a ship-fast attitude."
Hougan previously expressed strong support for Solana earlier this month, forecasting that the blockchain would become the preferred network for stablecoins on Wall Street. Concurrently, Bitwise CEO Hunter Horsley has also been advocating for Solana, arguing that its design is more advantageous for investors, potentially allowing it to gain an edge over Ethereum in the staking exchange-traded fund market.
Solana's Current Position Relative to Ethereum
Despite Hougan's optimism, Ethereum currently holds a dominant position in the market. According to data aggregator DefiLlama, Ethereum boasts the largest stablecoin market capitalization, exceeding $163 billion, with a total value locked (TVL) of over $85 billion.
Solana's figures are considerably lower, with a stablecoin market capitalization of over $14.9 billion and a total value locked of more than $11.3 billion.
Nonetheless, Hougan identifies Tron, Solana, and BNB Smart Chain as key "top challengers" vying for market leadership.
Growing Institutional Interest in Solana
Hougan also highlighted the increasing institutional interest in Solana. He cited recent developments, such as the adoption of the Solana blockchain by financial services company Western Union for its stablecoin settlement system on Tuesday, as evidence of this trend.
"It’s a newer asset and is playing catch-up against its peers in winning institutional mandates, but it’s gaining ground," Hougan commented.
"If I’m right, the combination of a growing market and a growing market share will be explosive for Solana. Just as with Bitcoin."
Bitwise has direct ties to Solana through its products, including its staking ETF, which was launched on Tuesday.
Bitcoin's Dual Growth Potential
Hougan extended his "two ways to win" thesis to Bitcoin, suggesting it also benefits from two key market dynamics. Firstly, a bet on the continued growth of the global store of value market, and secondly, Bitcoin's (BTC) potential to capture an increasing share of that market. He noted that success in either of these areas would lead to positive outcomes for investors.
"A mistake many investors make is focusing too much on Bitcoin winning market share and too little on the growth of the market. The global store of value market has grown by 10x in the past 20 years, from under $3 trillion in 2005 to $27.5 trillion today."