Solana could be the next big trade in crypto’s capital rotation

The rhythm of capital in digital assets tends to follow a familiar pattern, punctuated by the 4 year cycle often associated with Bitcoin’s 4 year issuance halving cycle, but with clear patterns within this 4 year cycle, the most interesting for investors being the ‘alt season’ where tremendous gains are possible for the more adventurous investor. 

Typically Bitcoin rallies first, establishing the cycle’s macro anchor. Ethereum (ETH), the 2nd largest crypto currency, follows, catalyzed this cycle by renewed institutional interest and its centrality to stablecoins and decentralised finance. Then, historically, the rotation broadens into 'blue chip' 'altcoins' moving further down in market cap and out the risk spectrum, fueling what is often referred to as “alt season.”

Today, we appear to be in the second stage of that sequence. ETH has begun to attract flows after Bitcoin’s strong run, buoyed by the approval of spot ETFs and a recognition of its evolving role in the global digital economy, the leading chain on which stablecoins are issued. The ETH/BTC chart shows a strong trend reversal, where ETH has softened against BTC since the last cycle top (late 2021) and is now moving higher as capital moves out the risk spectrum in anticipation of another classic alt season. Since April’s tariff fear fueled low ETH is up 180% while BTC is up 45%.

Why ETH is leading the rotation

Ether’s renewed strength is not a coincidence. Several structural drivers have come together at once:

• ETF flows: The approval of spot ETH ETFs provides a clean channel for institutional capital, replicating the catalyst that drove Bitcoin inflows over the last 18 months.
• Stablecoin growth: The majority of stablecoin issuance and settlement still occur on Ethereum, making ETH the backbone of this market. With stablecoins becoming a regulated piece of global liquidity infrastructure, post the GENIUS Act, ETH is in pole position to capture that growth.
• Yield: Since moving to proof-of-stake, ETH’s staking provides a native yield of 3-4% that is unavailable to Bitcoin. And this yield is now being turned on for ETF investors.

Ethereum has historically dominated stablecoin issuance with Tron, what could be considered an ‘offshore’ competitor in 2^nd place.

Solana: The Next Logical Step

If ETH is the rotation trade today, Solana (SOL) looks set to be the rotation trade tomorrow. There are three reasons why:

1. ETF Catalyst: A spot SOL ETF appears to be just weeks away, the SEC final deadline is 16 October, an it clearly meets the new crypto ETF guidelines. That single product launch could transform Solana’s market access, just as the ETH and BTC ETFs have. Institutions that have been watching from the sidelines will, overnight, have a regulated, liquid way to get exposure. SOL ETFs will also have a very compelling yield at 6-8%p.a..
2. Usage and Ecosystem Growth: Solana has emerged as the leading high-throughput blockchain, with a vibrant developer community and traction in consumer-facing applications — from gaming to payments to 24/7 equity trading. This gives SOL a fundamental story beyond speculation: real adoption, real use cases.
3. Capital Cycle Dynamics: Historically, alt season unfolds in waves. Bitcoin rallies first, ETH follows, and then high-beta assets with credible narratives outperform. Solana has already proven itself as the leading “other layer one.” With liquidity and ETF access about to improve, it is well positioned to capture the next flows.  This dynamic is supported and accelerated by easing monetary conditions which are now in place.

When stablecoin supply growth and total transactions are compared Solana is the clear winner of the top 3 chains. Solana is playing catch up in total issuance but growing fast, Solana payment partners now include VISA, Worldpay and Shopify supporting merchants with near zero fee instant payment settlement in USD stablecoins. With regulatory clarity now in place, and clear benefits for both merchant and customer we anticipate a significant uptick in issuance growth and a Solana to be the biggest beneficiary.

Positioning for What Comes Next

The capital rotation is happening: BTC strength has spilled into ETH, and Solana looks like the next stop. The upcoming ETF launch could be the spark that brings Solana into the institutional mainstream. For investors who believe in the cyclicality of crypto flows, the playbook is clear: accumulate ETH on dips, and position for SOL to follow.