Should you sell Ethereum for Solana? Lark Davis weighs in

Transcript

GM good morning welcome to the milk Road show The Daily crypto show that covers the wild world of crypto like a Tay covers your uncle's shiny bald head I'm your host Jay Hamilton and today we're answering one simple question for you should you sell your eth and move it into salana here to guide us is legendary crypto investor Lark Davis who holds both eth and salana I should start by saying that now today's episode is made possible by coin Geto API so stick around till the end to hear an exclusive offer for you our milroad listeners Lark we've had a bunch of questions in the milro Pro Discord from our community on Twitter I know you've been getting the same questions on Twitter as well has

the ethereum ETF been a failure should I sell my Ethan move it all into salana screw this I'm buying salana this is what I'm seeing across the timeline what do you think when you see this well I don't think there's any denying that Solana has been the breakout coin of this cycle I mean it's the preferred casino right now everybody wants to go and AP in aeme coins on salana and that's great Sal's got positive use cases there's more stuff going on the builders and stuff whatever showing up and the price action has been very very strong it has been a very strong coin to be trading a very strong coin to be holding so there's no denying that reality but but we pour a little you know water on the fire here so to speak

ethereum remains a very attractive asset in my opinion now look in terms of my Holdings I am much much deeper into ethereum in fact I have so little salana I don't even count it as part of my portfolio Holdings I have I know 20 Soul or something like that but I have investments in the salana ecosystem right so to make that clear that being said to come out now and say well the ethereum ETF has been a failure have we forgotten our history so quickly because I remember the exact same thing was said about the Bitcoin ETF a week after launch oh it's been a big failure look the price has gone down 20% therefore it has failed utterly and then what happened then what happened of course we had buy the rumors sell the news we had gray scale starting to

unwind in the first days which created a lot of panic and even though we knew it was going to come and to happen still people liked to panic in the market and so the price of Bitcoin went down around 20% in the two weeks following the listing date of the ETF and then we proceeded to move from $38,000 to $73,000 in about six weeks you know that's that's uh that's almost 100% gain for Bitcoin there now I'm not saying ethereum is going to do exactly the same thing we don't know we don't have crystal balls around here however we're seeing very similar attitudes play out right now we're seeing very similar Market sentiment play out right now and even back then everybody is saying sell your Bitcoin and buy salana well it

could have been interesting back then but anyway regardless I still have faith that we're going to see great traction starting to build here from the ethereum ETF one of the biggest things that I'm actually excited to see and is actually in a weird way currently probably causing a bit of let's say a bit of a hangover on The Price is the grayscale ETF outflows now this is the biggest sort of drama point with ethereum ETFs and so far we've seen 15% of the supply or something like that come out it's probably going to be 20% when we get the numbers for the 29th so look we're seeing huge outflows and that's to be expected again it's a weird situation with grayscale and what they've decided

to do with having a 2.5% fee is basically they want everybody to leave or they want enough people to leave but they're gambling on enough people staying that they're going to make more money anyway because they're 10x the next nearest fees 10x 10x but they're going to assume you know what probably half the people are going to not want to take the capital gains hit and so maybe we'll lose half of our assets under management we're going to keep the other half so we'll effectively get a 1.25% fee which is 5X what everyone else is getting so we're still going to make more money which is you know kind of Macky of ellion but I get it okay from a business perspective but um longterm not great shortterm not great either because we see huge outflows happening but much like with Bitcoin we saw huge outflows

in the first two weeks and then what happens most of the people who want to reposition from the ethereum grayscale ETF will reposition over Fidelity the reposition over the Black Rock some people will take profits obviously some people have been holding this stuff for a very long time they're finally getting liquidity they're they're checking out and that's fine to do too but overall I think this is one of those stories that widely misunderstood and given more importance short-term price action wise than really is warranted because the long-term price impact has such big potential other than the grayscale outflows which have been significant what are your thoughts on the ethereum

ETF so far we've seen uh we're recording this on on Monday so we've got we don't have Monday's data yet but we have four days from last week only four days might I remind you so everybody take a deep breath for a second here but what are you seeing so far we're seeing great volumes I think that's one thing to point out volumes have been absolutely huge definitely interest here from from the side of Wall Street Black Rock and Fidelity have seen great flows again a lot of that's going to be repositioning and I think that to an extent you're going to see Wall Street waiting a bit to go in heavily much like they did with the Bitcoin ETF we had great flows sure but most of it was just repositioning the first few weeks grayscale money flowing to other funds or getting out

and once wall Street's probably seen enough of that grayscale money come out then they'll start deploying Capital heavily into ethereum would be my bet so right now flow's been good volume's been good but I think we'll really see that ramp up once Wall Street understands that the grayscale problem has largely subsided okay so if we go back to the initial question here which is should I rotate out of eth and into salana how do you think about answering that question it's a very interesting question to think about because the I suppose assumption here is that we're going to see massive outperformance continue for salana and perhaps either ethereum kind of just approximately goes to plan and we eventually rise up to 15K as we think

could happen as our sort of long-term price prediction for this cycle and it just kind of follows the plan already even underperforms because everybody's getting so underwhelmed that nobody uses the ethereum main chain anymore except all the people who use it every day and nobody's using layer 2os except a Millions people who using it every day you know aside from that kind of stuff right demand for ethereum is definitely there as an asset you have to remember it is the the gas of all these layer 2 networks well most the layer two networks let's say some use other gas but for the majority of them they're using it as gas so definitely I'd say East at least going to continue to plan so when you want to say okay I'm going to sell my ethereum and buy Solana you're accounting for you want to see outperformance happen now my

prediction for Solana has been that it's going to end up around $1,000 maybe 1,00 bucks sort of the market top right so in that scenario let's say salana goes to 11100 bucks ethereum goes to $155,000 you''ve maybe outperformed you've course taken the risk you've taken the early tax hit for the majority of you listening you have to pay tax when you sell that etherum for the salana okay and that could affect your planning on how the cycle goes having to pay taxes earlier than you plan to etc etc etc you might be falling into the uh shortterm versus long-term capital gains depending when you're bought your eth Etc ET a lot of things to think about here okay and for what if if that's where the prices end up then you've

outperformed ethereum by 30 40% maybe something like that which doesn't necessarily sound worth the risk the counterargument to that almost would be well ethereum's done it's the old horse we're done beating it we're moving on to the next thing and Salon is the next thing and Salon is going to flip ethereum I don't think that's going to happen at least not this like maybe we can start talking about that in a few years but I think ethereum's number two position currently looking pretty solid considering everything that's going on in E ecosystem not just the liquidity from ETFs Etc but uh everything we've talked about ready too but you would then be assuming okay salana is going to outperform

ethereum 2x 3x I mean right now it's about 20% of the market cap of ethereum could there be an argument for it for having half the market cap of ethereum this cycle on on a sort of tracking basis right so ethereum goes up a salana goes up and salana just goes up more so in that situation you would double potentially even triple your returns by investing in salana and getting out of ethereum again there's a lot of assumptions to be made here on that situation and that's sort of the heavy bull case for salana and assuming that none of the competitors to salana whether that be Aptos or sway or any of the other ones are going to start tapping into his market share as well so

I think there's a few different reasons why this is coming up obviously the ETF not pumping prices is probably one of the big reasons everyone's thinking well what the heck I expected this you listeners might remember I hope you remember we told you that this was going to happen we expected this to be and not just myself and Lark but Matt Hogan zenica many guests on the show over the past two weeks have said exactly this that they we did not know what would happen in the first few weeks of the ETF if we looked at Bitcoin bitcoin price went down and then as you said it skyrocketed after that so let's be ready for that same thing so I think we can put the EF aside for a second because we thought this was likely going to be the

case but it doesn't mean the EF is a failure the other thing that a lot of people keep bringing up is activity a lot of people are talking about how salana now tops ethereum in Dex volume in active addresses in fees in Revenue generation how do you think about this and does this give you the reason to say yes salana is more has better upside right now this is one of the most interesting things about salon right now and it and a lot of these metrics do fail fa to sort of take in the broader ethereum ecosystem majority of time when they're talked about not all the time some sometimes you take that in as well and we're really when we talk about the broader ethereum ecosystem we're

primarily talking about base and arbitrum stuff like uh optimism and then yeah we start going right down the tier level ZK syn leny all stuff that are just not seeing the same levels of usage or adoption as like base and arbitra in particular but they're very much ethereum ecosystem coins and have a direct impact on the demand in the price of ethereum so they're very much worth counting in here but when we see Solana and what it's doing right now it is absolutely a breakout in terms of adoption this cycle because again Solana is the preferred Casino of the cycle and it reminds me a lot of where we saw ethereum in 2017 because ethereum's big use case in 2017 was icos and that drove

the network crazy price of ethn crazy all that kind of stuff right now for most people I would ask you what are a lot of protocols on Solana Beyond meme coins and look we got a lot of stuff happening out there right we have real estate markets on parcel we have Perpetual swaps on Drift We have you know Dex aggregation with Jupiter and stuff like that and Launchpad over there too but most of the attention most of the attention right now is for meme coins on salana and it's sort of the the killer app so to speak and I know they're different coins but if you think about it as a sort of total idea it's the Killer app right now for salana people love the speculation people love the the Allure of hoping to make a big and get rich overnight so that's driving

massive activity on chain right now people love it people love it you can't fight that reality and so we're seeing decentralized exchange volumes going absolutely insane and Topping some days even multiple not just ethereum but ethereum plus base plus arbitrum combined sometimes we're seeing these kind of volumes being swapped so abs absolutely when you consider the metrics of salana active addresses daily daily total transactions Revenue all this stuff salana does feel undervalued by comparison to ethereum right now now that mean that case will necessarily continue does that means that others can't get into the market share and

stuff like that hard to say Salon has shown insane strength so far and again we have to point out that if you are going to sell your ethereum for Solani you're expecting that all this stuff is going to have very strong impact and Salon is going to outperform to an order of magnitude of two or 3x and potentially even at some point track very closely with the market cap of ethereum and it'll be the third place coin with a $400 billion doll market cap or whatever ethereum happens to be approximately at the time that would be the trade idea behind saying this is worth swapping your eth for Soul at this stage in the market have we looked back a few months eth has um underperformed

versus salana largely throughout the cycle right so if you go back to 2023 for example ethereum was a th000 bucks and salana was 20 bucks so a salana has done a 10x and ethereum has done a well 3x in that time so it's very much different in terms of returns have already happened and is that going to continue or has salana already had the majority of that catchup move it's an interesting interesting thought I don't have a definitive answer for you guys we're just talking about what could be here if you think all those metrics have incredible importance in that it's going to see Salon outperformance continue to an order of magnitude then perhaps

there's something to it right so if you were taking the salon side of this bet you would be betting that this activity will not only continue but will increase in accordance as it has ready this cycle which you should be comfortable that that's your outlook and that's your belief and then not to mention you also need to think about because one thing that I've heard multiple people say is what do you want to be holding at the end of this cycle obviously hopefully you have a exit strategy and you sell at the right time but you're not going to sell everything you're probably going to keep some and maybe you also maybe you don't time it right that's always a

possibility you always have to the downside with your Investments what do you think is the downside of eth versus the downside of Sal the upside feels pretty clear the upside right now we've gone through that but what about the downside of each it's an interesting thought to think about the end of the the end of the bull market right where we get to Great it's all very exciting and people don't generally want to think about what comes next because it's scary and it's uncertain but the truth is a lot of people will have to round trip a lot of their bags how far down do of these coins go will institutional demand make the difference this time to some extent yes to some extent no maybe Bitcoin is going to have its shallowest bare Market ever and it's only going to

drop 65% this time cool right ethereum's gonna have its shallowest bare Market ever it's only going to drop 70% this time still a large drop exactly right and Solana Solana's it's gonna be the breakout the story and it's only going to drop 75% this time right so the truth about crypto assets more broadly is that again we've we've discussed the idea it's the beta the beta the beta the beta beta we are pretty far on the risk Spectrum for the average investor despite our deep belief in this being the future of finance and all that fun kind of stuff you still have to recognize the reality this Market moves pretty strongly in Cycles now I have thought a long time about

this and my current plan I'm assuming I could hold myself properly accountable to the plan is I will be selling everything except my Bitcoin including my ethereum so I'm going to sell my ethereum this cycle if I can sell it over 10K I'll be a very happy camper if we do get up to 15K that'll be epic great much like I think with salana salana at 1100 bucks is probably going to be a pretty juicy sales Point not Financial advice guys we're just talking about what the charts are showing here but but that that if we see salana outperformance that $100 Target may be insufficient right this is based on sort of standard modeling and standard demand if we look back as an interesting example Dogecoin last cycle Dogecoin

blew through everything right so if you charted out where Dogecoin could go this cycle you would have been dramatically wrong to the downside because it went so much higher and blew right past all the Fibonacci levels and all that kind of stuff to actually basically go an entire level higher in in terms of that so again selling your eth now jumping into salana the expectation would be that there's going to be some kind of massive outperformance moment and that the Market won't sort of regulate itself in its overall demand once it starts getting too big people start going down the risk Spectrum looking for other stuff etc etc so to summarize on today's episode you are or are not selling your eth for Solana right now I am not

selling my eth for salana right now that the idea has crossed my mind don't get me wrong but um I think that overall ethereum still has great upside left in it you know come on guys if it goes to 15K it's still a 5x from here right not bad not bad right and to sell that to jump into salon and I'm a big fan of Salon I use Salon all the time just to be clear right and obviously HD sight should have bought a load truckload of salon at 20 bucks but I didn't okay and that's fine congrats to everybody who did we're always rooting for people's bags around here right but the salon upside from here is it 6X is it 7x 8X maybe that would be more sort of in line with my thinking my current projections

that maybe those projections are not bullish enough and I'm underestimating the potential salana for this cycle but to jump out of something that I think's probably going to do a 5x to hop into something that maybe's going to 6X doesn't necessarily seem worth the trouble right well you decide let us know if you're listening to this in the comments on YouTube or on Spotify or send us a tweet I want to know are you guys going to sell your eth and move it into Sal curious how many of you are doing it or how many are sticking strong in eth no matter what do your own research don't just listen to us do your own research make your own plan and think for yourself that is the most important in when you're making these Investments because as Lark said they

are high risk Lark thanks so much for joining us again today stick around to hear an ad from coin Geto API with a special offer just for you our listeners thanks so much for listening in everybody have a wicked awesome day every crypto project needs reliable on chain data at milk Road We Trust coin gecko API for depend Dependable crypto prices for you and it's not just us coin Geo API supplies thousands of crypto projects with Comprehensive data including prices market trends nft data and onchain Dex data best part its integration and developer resources make it easy to set up friends of the Milkman guess what you get a free trial right now visit coingecko.com

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