AI Rally Pause Could Shift Capital to Ethereum and Solana
Cryptocurrencies may attract more investment if the artificial intelligence stock rally slows down. Raoul Pal, co-founder of Real Vision, noted that a weaker dollar could also boost crypto markets, though current conditions like high Treasury yields and a strong dollar are limiting liquidity. He cautioned that while AI and crypto compete for capital, a sharp decline in AI markets could actually harm crypto by reducing overall liquidity.
Pal highlighted that Ethereum and Solana are likely to benefit more from AI-driven crypto activity than Bitcoin. This is due to their smart contract capabilities, which AI agents can use for transactions and fundraising. He also mentioned that Amazon Web Services now supports stablecoin payments for AI agents, and Coinbase facilitates payment verification through the x402 protocol.
Discussing the competition between Ethereum and Solana, Pal urged caution against predictions that Solana will surpass Ethereum in market capitalization. Data from DefiLlama showed Solana with 3.2 million active addresses compared to Ethereum’s 387,000, but Ethereum’s total value locked in DeFi protocols was significantly higher at $54.4 billion versus Solana’s $6.7 billion. Pal described Ethereum as having greater economic density, attracting more capital relative to its user base.
Pal refrained from providing public price targets, noting that his forecasts are often edited and redistributed. He acknowledged the meme-like nature of Bitcoin reaching $1 million by 2030 but suggested it could be achievable by 2032.