Observe market analysts' movements: capital rotation is shifting from public chains to private infrastructure

Following the insights of well-known industry analysts often reveals deeper market shifts. Recently, analyst ElonTrades, who gained fame for bullishly predicting Solana’s price when it was below $1, released an important perspective: future capital flows may not be driven by competition among mainstream public blockchains like Ethereum and Solana, but by a fundamental opposition between public blockchain ecosystems and private infrastructure.

Issues Exposed by Layer 2 Solutions

For the Ethereum ecosystem, ElonTrades believes that while Layer 2 solutions address throughput issues, they introduce new challenges. Multi-chain fragmentation leads to dispersed liquidity, cross-chain bridge risks, and a complex, confusing user experience. This situation pushes retail users toward simpler, single-chain ecosystems, such as Solana, which currently trades around $83.84.

Solana’s low fees, fast transactions, and integrated user experience give it an advantage in the retail market. However, analysts argue that this advantage is only apparent in retail comparisons; from an institutional capital perspective, the situation is entirely different.

Mismatch Between Institutional Needs and Public Blockchains

Traditional financial institutions have evaluated the entire crypto ecosystem but find that existing public blockchain solutions cannot meet their core requirements. Institutions demand privacy protection, access control, regulatory compliance, and counterparty control—features difficult to achieve on decentralized public chains.

As a result, traditional finance has not chosen to integrate with existing public blockchains but is instead building infrastructure from scratch on parallel tracks to meet their needs. Canton Network exemplifies this trend—it provides blockchain-style settlement and tokenization for financial institutions, with built-in privacy and access controls.

Divergence of Two Worlds

According to this logic, the crypto market may face a structural split: retail speculative activity concentrates on a single, highly liquid public chain, while institutional tokenization occurs on private networks. Although Layer 2 addresses Ethereum’s scalability issues, it offers no advantage in either camp—too complex for retail users and too transparent for institutions.

When capital flows no longer follow the expected “ETH vs. SOL” competitive pattern but instead shift toward a fundamental divide between “public vs. private,” market participants need to reassess their long-term investment logic. Observing and understanding the movements of analysts and market observers like this can help anticipate such paradigm shifts.