Why The Chains That Seem Faster May Not Be The Future Of Institutions

Cryptocurrency markets operate under constantly evolving narratives. When one blockchain appears faster, when an ecosystem seems hotter, when an asset looks to be moving, that’s where capital flows. But this dynamic is beginning to be questioned. An analyst known for an accurate prediction about Solana years ago now argues that the next major capital rotation could completely challenge our understanding of competition among public blockchains.

The vision is provocative: while many expect institutions to choose between Ethereum, Layer 2s, or Solana, the truth may be that they are building a completely separate world, off the radar of public chains.

The Thesis That Built His Reputation as an Analyst

ElonTrades became known in 2020 for a simple but accurate thesis: Ethereum would face scalability limitations, and users would migrate to blockchains optimized for speed and efficient execution. This prediction proved correct. Solana emerged as one of the most dynamic retail crypto ecosystems, driven by low fees, fast transactions, and an integrated user experience that many traders prefer over fragmented Layer 2 architectures.

Today, with Solana (SOL) trading around $85.40, the analyst is reshaping his view for 2026. His new thesis isn’t just about which blockchain will win, but about a much deeper division in the crypto market.

Layer 2s Seem to Be the Solution, But They Created New Problems

Layer 2s were implemented to solve Ethereum’s bottleneck, but the solution brought new challenges. Instead of a unified network, a maze of rollups, liquidity bridges, involved assets, and fragmented pools was created. For the average user, the experience has become more complex, no longer simpler.

The main problems include:

• Liquidity fragmentation: Capital is spread across multiple layers, reducing market depth
• Bridge risk: Transfers between layers introduce centralized failure points
• UX confusion: Users face constant decisions about which Layer 2 to use
• Management complexity: Managing assets across multiple chains has become a technical task

This reality has driven retail users toward chains that seem simpler and more integrated, like Solana. But this migration toward UX clarity says nothing about institutional interests.

Why Institutions Are Not Choosing Either Ethereum or Solana

Here’s the critical point of the analysis: financial institutions have analyzed the entire landscape—Ethereum, Layer 2s, Solana—and arrived at an uncomfortable conclusion for the crypto market: none of these options meet the actual institutional requirements.

Institutions need:

• Full privacy: Confidential transactions without public exposure
• Access control: Granular permissions over who can participate
• Built-in regulatory compliance: Native compliance, not as an add-on
• Secure counterparty custody: Control over who their partners are

No public blockchain can offer all of this simultaneously. Instead of adapting to the public crypto infrastructure, institutions are doing something different: building parallel systems.

Private Infrastructure: A Silent Parallel World

The clearest example is Canton Network, a platform designed specifically for financial institutions seeking blockchain-style settlement and tokenization, but within a private, permissioned environment. Canton allows participants to create distributed networks with their own rules, without the need for full transparency on the chain.

The implication is radical: the largest flows of institutional capital may never touch Ethereum, Solana, or any public blockchain. They could flow entirely within private infrastructure built for use cases that no retail crypto observer can see.

This would represent a monumental structural shift. Institutional adoption would not be about which blockchain gains market share, but about creating two parallel financial ecosystems: one public (retail) and one private (institutions).

A Silent Bifurcation: The Future May Be More Divided Than We Imagine

If this thesis is correct, the outcome would be a clear split:

Retail speculation: Concentrates on one or two public blockchains that seem to offer the best combination of speed, liquidity, and user experience.

Institutional tokenization: Happens on custom-built private networks, invisible to the casual crypto observer.

Layer 2s would be caught in the middle: Too fragmented to compete with monolithic chains in retail. Too open and permissionless to meet institutional requirements. They would be caught between two worlds, without fully dominating either.

What This Division Means for Investors

The traditional narrative of “institutional adoption” assumed that institutions would choose among existing public blockchains. This analysis suggests that’s not how it will work. Institutions have the capital, sophistication, and motivation to build their own infrastructure.

If they are right, the biggest winners in crypto may not be the chains that the entire community follows. They will be the systems capable of serving both worlds: a clear retail experience and deep compliance for institutions.

The next rotation wouldn’t be “Ethereum to Solana.” It would be the silent bifurcation between public and private infrastructure, each serving its own masters.