FROM ETH TO SOL: WHY DOES L1 END UP LOSING TO BITCOIN

Original title:Can L1s Company Against BTC as Criptomoney?

By AvgJoesChrypto, Messari

Original: Tinker Bell, Daily Daily Planet

 

Editor: Recently, Dragonfly ' s well-known partner Haseeb Qureshi published a long post on rejection of cynicism, embraces index-level thinking, unexpectedly bringing community discussions back to the core: how much is left? The following are excerpts from @MessariCrypto's forthcoming release The Crypto Theses 2026, organized by Odaily Planet Daily。

Encryption of currency driven industry

IT IS IMPORTANT TO REFOCUS THE DISCUSSION ON "ENCRYPTED MONEY" ITSELF, BECAUSE MOST OF THE CAPITAL IN THE ENCRYPTION INDUSTRY IS ULTIMATELY SEEKING TO OPEN UP TO "MONETIZED ASSETS". THE TOTAL MARKET VALUE OF THE ENCRYPTION MARKET IS CURRENTLY $3.26 TRILLION, OF WHICH BTC ACCOUNTS FOR $1.8 TRILLION, OR 55 PER CENT. OF THE REMAINING $1.45 TRILLION, APPROXIMATELY $83 TRILLION IS CONCENTRATED IN VARIOUS L1 LINKS. IN OTHER WORDSApproximately $2.63 trillionI don't knowAbout 81 per cent of the total market was invested in assets that the market considered to be money or that might receive a currency premium in the futureI don't know。

In this context, whether you are a dealer, investor, capital manager or developer, it is essential to understand how the market grants or withdraws a currency premium. There is nothing in the encryption industry that drives changes in valuation better than a market's willingness to regard an asset as a “currency”. Thus, predicting which assets will receive a currency premium in the future is almost the most important variable in the construction of the portfolio。

SO FAR, OUR MAIN FOCUS HAS BEEN ON THE BTC, BUT THERE IS ALSO A NEED TO DISCUSS THE REMAINING L1 ASSETS OF THE $83 TRILLION THAT ARE "MAY OR MAY NOT BE MONEY." AS MENTIONED EARLIER, WE EXPECT THAT BTC WILL CONTINUE TO ABSORB MARKET SHARES FROM GOLD AND OTHER NON-SOVEREIGN VALUE STORES IN THE COMING YEARS. BUT IT ALSO RAISES THE QUESTION:HOW MUCH SPACE IS LEFT IN L1? WILL ALL SHIPS (ASSETS) FLOAT (BENEFITS) WHEN THE TIDE RISES? OR WOULD BTC TAKE SOME OF THE MONEY PREMIUM OUT OF THE L1 CHAIN IN PURSUIT OF GOLD

TO ANSWER THESE QUESTIONS, IT IS FIRST NECESSARY TO LOOK AT THE CURRENT VALUATION PATTERN OF L1. L1-ETH ($361.15 BILLION), XRP ($13.01 BILLION), BNB ($12.64 BILLION) AND SOL ($74.68 BILLION) - - THE TOTAL MARKET VALUE AMOUNTED TO $68,658 MILLION, OR 83 PER CENT OF THE TOTAL L1 PLATE. AFTER THE FIRST FOUR, THE MARKET VALUE GAP (FOR EXAMPLE, TRX IS $26.67 BILLION), BUT THE TAIL VOLUME IS STILL NOT SMALL. THE TOTAL MARKET VALUE OF L1 IS STILL $18.6 BILLION, OR 2 PER CENT OF THE TOTAL MARKET VALUE OF L1。

MORE IMPORTANTLY, THE L1 MARKET VALUE IS NOT EQUIVALENT TO A MERE "CURRENCY PREMIUM". L1 HAS THREE MAIN VALUATION FRAMEWORKS:

(i) Currency Premium

Real economic value (REV)

Economic Security Demand

Thus, the market value of a project is not determined solely by the fact that the market views it as a currency。

L1 VALUATION DRIVEN BY A CURRENCY PREMIUM, NOT INCOME

Despite the existence of multiple valuation frameworks, the market is increasingly inclined to move from "Currency premiumL1 is assessed from the perspective of the ‘income-driven’ perspective. Over the past few years, all L1s with a market value of more than $1 billion have remained generally in the range of 150 to 200 times. But the overall data is misleading because it contains Tron and Hyperliquid. In the last 30 days, TRX and HYPE have contributed 70 per cent of the income of the group, but only 4 per cent of the total market value。

It's only after these two anomalies have been removed that the true story becomes apparent。DESPITE THE CONTINUOUS DECLINE IN INCOME, L1 VALUATIONS ARE RISING. THE ADJUSTED MARKET SHARE SHOWS A CLEAR UPWARD TREND:

:: November 30, 2021: 40 times

:: November 30, 2022: 212 times

:: November 30, 2023: 137 times

:: November 30, 2024: 205 times

• November 30, 2025: 536 times

If read from the point of view of REV, the market may be considered to be pricing future income growth. This explanation is not valid, however, because in the same group (which still excludes Tron and Hyperliquid), L1 income is declining almost every year:

:: 2021: $12.33 billion

• 202.2: $4.89 billion (per year - 60 per cent)

• 2023: 2.72 billion United States dollars (44 per cent over the same period)

:: 2024: $3.55 billion (+31 per cent)

:: 2025: Annualization of $1.70 billion (52 per cent over the same period)

In our view, the simplest and most direct explanation is:These valuations are mainly driven by currency premiums rather than current or future incomeI don't know。

L1 KEEPS LOSING BITCOIN

If the L1 valuation is driven mainly by the market ' s expectations of its currency premium, the next question is: What shapes such expectations? A simple way to compare them with BTC price performance. If the changes in the currency premium mainly reflect the BTC's trend, then the assets should perform in a similar way to the BTC's "beta coefficient"; if the currency premium comes from the unique factors of each L1, then their relevance to the BTC should be weaker and their performance special。

AS L1 REPRESENTATIVES, WE HAVE SELECTED THE TOP 10 L1 TOKENS (EXCLUDING HYPE) TO MEASURE THEIR PERFORMANCE IN RELATION TO BTC SINCE 1 DECEMBER 2022. THESE 10 ASSETS REPRESENT APPROXIMATELY 94 PER CENT OF THE MARKET VALUE OF L1 AND ARE MORE REPRESENTATIVE. OVER THIS PERIOD, EIGHT ASSETS LOST IN ABSOLUTE RETURN TO BTC, SIX OF THEM BEHIND BY OVER 40 PER CENT。BTC: XRP AND SOLI DON'T KNOW. BUT THE EXCESS RETURNS OF XRP ARE ONLY 3%, AND GIVEN ITS HISTORY OF BEING DOMINATED BY DIASPORA FUNDING, WE WILL NOT OVER-READ IT。THE ONLY THING THAT REALLY HAD SIGNIFICANT EXCESS RETURNS WAS SOL, WHICH WON BTC 87%。

However, deep disassembly reveals that SOL's "run wins" may not be as strong as they appear. During the same period in which SOL won 87 per cent of BTC, the ecological fundamentals of Solana showed an exponential explosion: DeFi TVL grew by 2,988 per cent, handling fees increased by 1,983 per cent and DEX transactions increased by 3,301 per cent. By any reasonable criteria, the ecological scale of Solana has increased 20 to 30 times since the end of 2022, but the corresponding SOL price is only 87 per cent BTC。

Please read that again。

TO ACHIEVE A TRULY SIGNIFICANT EXCESS IN THE GAME WITH BTC, AN L1 DOES NOT WANT AN ECOLOGICAL GROWTH OF 200 PER CENT OR 300 PER CENT - IT NEEDS AN INCREASE OF 2,000 PER CENT-3,000 PER CENT TO ACHIEVE A FEW DOZEN PERCENTAGE POINTS OF EXCESS。

Taken together, our judgment is:WHILE THE MARKET CONTINUES TO PRICE L1 WITH THE EXPECTATION OF A "POSSIBLE FUTURE CURRENCY PREMIUM", CONFIDENCE IN THESE EXPECTATIONS IS RETREATING. AT THE SAME TIME, THE MARKET HAS NOT WAVERED AT THE BTC'S MONETARY PREMIUM AS A "ENCRYPTED CURRENCY" -- EVEN IF IT CAN BE SAID THAT THE LEADING ADVANTAGE BETWEEN THE BTC AND THE VARIOUS L1S IS GROWING。

WHILE ENCRYPTED CURRENCIES DO NOT THEMSELVES REQUIRE FEES OR REVENUES TO SUPPORT VALUATION, THESE INDICATORS ARE CRITICAL FOR L1. UNLIKE BTCL1 NARRATIVES DEPEND ON BUILDING ECOSYSTEMS (APPLICATIONS, USERS, THROUGHPUTS, ECONOMIC ACTIVITIES, ETC.) TO SUPPORT THEIR TOKEN VALUEI DON'T KNOW. HOWEVER, IF AN L1 ECOLOGY IS SHOWING AN ANNUAL DECLINE (REFLECTED IN PART BY FALLING REVENUES AND FEES), IT LOSES ITS ONLY COMPETITIVE ADVANTAGE OVER BTC. WITHOUT REAL ECONOMIC GROWTH, ITS "ENCRYPTED MONETIZATION" STORY WILL BECOME INCREASINGLY DIFFICULT TO ACCEPT IN THE MARKET。

Looking ahead

We are looking aheadWe don't think this trend will be reversed in 2026 or longerI don't know. With a few possible exceptions, we..IT IS EXPECTED THAT THE L1 PLATE WILL CONTINUE TO LOSE MARKET SHARE AND BE FURTHER SQUEEZED BY BTCI DON'T KNOW. L1 VALUATIONS WILL CONTINUE TO SHRINK AS THE MARKET BECOMES CONVINCED THAT BTC HAS THE STRONGEST CLAIM FOR THE NARRATIVE OF "ENCRYPTED CURRENCY" BECAUSE ITS VALUATION DEPENDS PRIMARILY ON FUTURE CURRENCY PREMIUMS. WHILE THE BTC WILL ALSO FACE CHALLENGES IN THE COMING YEARS, THE PROBLEMS ARE STILL TOO FAR AWAY FROM REALITY AND TOO MANY VARIABLES TO EFFECTIVELY SUPPORT THE CURRENCY PREMIUM FOR THE COMPETITION L1。

FOR L1The threshold of proof has been raisedI DON'T KNOW. THEIR NARRATIVES ARE NO LONGER SUFFICIENTLY ATTRACTIVE COMPARED TO THE BTC AND CAN NO LONGER RELY ON MARKET FANATICISM TO SUSTAIN VALUATION OVER THE LONG TERM. THE TIME WHEN THE STORY OF "WE CAN BECOME CURRENCIES IN THE FUTURE" COULD HOLD UP TRILLIONS OF DOLLARS IN VALUE IS CLOSING. INVESTORS NOW HAVE DATA FOR 10 YEARS TO PROVE THAT THE L1 CURRENCY PREMIUM CAN BE MAINTAINED ONLY IF THERE IS EXTREME ECOLOGICAL GROWTH. ONCE GROWTH STAGNATES, L1 WILL CONTINUE TO LOSE THE BTC, AND THE CURRENCY PREMIUM WILL DISAPPEAR。