The Crypto Hierarchy Problem: Why Investors Are Still Confused About What Comes After Bitcoin and Ethereum

Reading through today’s crypto market updates, one comment from Coinbase Asset Management really caught my attention. Anthony Bassili, the president of one of the largest crypto asset management firms in the United States, basically admitted what many of us have been thinking but nobody wanted to say out loud: after Bitcoin and Ethereum, the crypto investment landscape becomes remarkably unclear.

“There’s a very, very clear view in the investor community in terms of the right first portfolio is Bitcoin. The next is Bitcoin, Ethereum,” Bassili explained during The Bridge conference in New York this week. But here’s where it gets interesting – he described Solana as only “maybe” the third choice, followed by what he called a “very wide gap” before XRP even enters the conversation. This isn’t just market commentary; it’s a fundamental admission that the crypto industry still hasn’t solved its hierarchy problem after more than a decade of development.

The timing of these comments feels particularly significant given the current market dynamics. As of November 2025, institutional investors have poured billions into Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust (IBIT) alone holding over $25 billion in assets under management. Ethereum has similarly benefited from institutional adoption, especially with the successful launch of Ethereum ETFs earlier this year. But when you look at the next tier down, the investment thesis becomes muddled, and that’s creating some fascinating market distortions.

Consider Solana’s position in this hierarchy. Trading around $240 as of this writing, SOL has demonstrated remarkable technical capabilities with transaction speeds exceeding 65,000 TPS and fees often below $0.01. The network has processed over 100 billion transactions since its mainnet launch, and its DeFi ecosystem has locked up more than $8 billion in total value. Yet Bassili’s hesitation to definitively place it as the third choice reflects broader institutional uncertainty about proof-of-stake networks and their long-term viability compared to Bitcoin’s proven proof-of-work security model.

Market Fragmentation and the Search for Product-Market Fit

What’s particularly telling about Bassili’s analysis is his emphasis on “product market fit” for whatever network might claim that coveted fourth position. This language reveals something crucial about where we are in the crypto adoption cycle. Unlike traditional asset classes where value propositions are well-established, digital assets are still in an experimental phase where utility and speculation intertwine in complex ways.

The XRP situation perfectly illustrates this complexity. Despite being one of the oldest cryptocurrencies, launched in 2012 by Ripple Labs in San Francisco, XRP’s institutional adoption remains limited by ongoing regulatory uncertainty. The SEC’s lawsuit against Ripple, while partially resolved in Ripple’s favor regarding programmatic sales, continues to cast shadows over institutional adoption. Trading at approximately $0.58, XRP’s market capitalization of roughly $33 billion places it among the top cryptocurrencies by market cap, yet Bassili’s comments suggest institutional investors view it as significantly less attractive than Solana.

This perception gap becomes even more interesting when you examine the fundamental differences between these networks. Ripple’s focus on cross-border payments has generated partnerships with over 300 financial institutions globally, including Santander and American Express. The network can process 1,500 transactions per second with settlement times of 3-5 seconds, making it technically superior to traditional SWIFT transfers for international payments. However, the regulatory overhang and questions about decentralization continue to limit institutional appetite.

Meanwhile, other contenders for that third and fourth position are making compelling cases. Cardano (ADA), developed by Charles Hoskinson’s Input Output Global in Edinburgh, Scotland, has built a research-driven blockchain with formal verification methods and a strong academic foundation. With over 1,300 projects building on its network and a market cap exceeding $15 billion, Cardano represents a different approach to blockchain development that emphasizes peer-reviewed research and gradual, methodical upgrades.

Polygon (MATIC), the Mumbai-based scaling solution for Ethereum, has taken yet another approach by positioning itself as essential infrastructure rather than a competing blockchain. With over 37,000 decentralized applications deployed and partnerships with major brands like Starbucks and Nike, Polygon’s $7 billion market capitalization reflects its success in the layer-2 scaling market. However, its dependence on Ethereum’s security model raises questions about its long-term positioning as an independent investment thesis.

Corporate Adoption Signals and Market Maturation

The Steak ‘n Shake announcement about expanding into El Salvador provides an interesting counterpoint to the institutional uncertainty Bassili described. The Indianapolis-based restaurant chain, which began accepting Bitcoin payments in May 2025, is now opening locations in the world’s first country to adopt Bitcoin as legal tender. This move represents a fascinating intersection of corporate strategy and geopolitical crypto adoption that could influence how businesses think about cryptocurrency integration.

El Salvador’s Bitcoin experiment, launched in September 2021 under President Nayib Bukele, has been closely watched by economists and crypto enthusiasts alike. The country has accumulated approximately 2,850 Bitcoin worth roughly $250 million at current prices, representing about 1.5% of its GDP. While critics point to the volatility and implementation challenges, supporters argue that Bitcoin adoption has increased financial inclusion and attracted international attention to the Central American nation.

Steak ‘n Shake’s expansion into this environment suggests that some corporations see Bitcoin adoption as more than just a payment method – it’s becoming a market positioning strategy. The company’s use of beef tallow for cooking, marketed as a healthier alternative to seed oils, aligns with Bitcoin community values around natural, unprocessed alternatives to fiat currency systems. This cultural alignment between Bitcoin adoption and broader lifestyle choices represents an underexplored aspect of cryptocurrency market development.

The broader implications extend beyond individual corporate decisions. According to recent data from Chainalysis, merchant adoption of Bitcoin payments has grown by 34% year-over-year, with Latin American countries leading the growth. Countries like Argentina, Brazil, and Mexico have seen significant increases in Bitcoin payment processing, driven by currency instability and inflation concerns. This geographic pattern suggests that Bitcoin adoption may follow different trajectories in emerging markets compared to developed economies.

Robert Kiyosaki’s recent comments about holding Bitcoin and gold during market turbulence add another layer to this adoption narrative. The “Rich Dad Poor Dad” author, with his 2.8 million followers on X, represents a influential voice in retail investment education. His argument that global cash shortages are driving market crashes while making hard assets more valuable reflects a broader macroeconomic perspective that’s gaining traction among cryptocurrency advocates.

Kiyosaki’s reference to “The Big Print” – the theory that governments will resort to massive money creation to address mounting debt loads – aligns with Bitcoin’s original value proposition as a hedge against monetary debasement. With global debt levels exceeding $300 trillion and central banks maintaining historically low interest rates despite inflation concerns, this narrative continues to resonate with both retail and institutional investors seeking alternatives to traditional monetary systems.

The challenge for the cryptocurrency industry, as Bassili’s comments highlight, is translating these macro narratives into clear investment frameworks for the assets beyond Bitcoin and Ethereum. While Bitcoin benefits from its first-mover advantage and digital gold narrative, and Ethereum profits from its smart contract platform dominance, the value propositions for other cryptocurrencies remain more complex and harder to communicate to traditional investors.

This complexity creates both opportunities and risks for the broader market. On one hand, the lack of clear consensus about third and fourth-tier cryptocurrencies suggests significant upside potential for projects that can demonstrate clear utility and adoption. Networks that solve real-world problems and gain institutional recognition could see dramatic value appreciation as they move from speculative assets to legitimate portfolio components.

On the other hand, this uncertainty also indicates that the cryptocurrency market remains relatively immature compared to traditional asset classes. The fact that even sophisticated institutional investors struggle to identify clear value propositions beyond the top two cryptocurrencies suggests that much of the current market capitalization in alternative coins may be speculative rather than based on fundamental value creation.

Looking ahead, the resolution of this hierarchy problem will likely depend on several key factors. Regulatory clarity, particularly in major markets like the United States and European Union, will play a crucial role in institutional adoption of alternative cryptocurrencies. Technical developments, including improvements in scalability, security, and interoperability, will influence which networks can demonstrate sustainable competitive advantages. Most importantly, real-world adoption and utility will determine which projects can move beyond speculation to become legitimate components of diversified investment portfolios.

The cryptocurrency industry’s maturation process is far from complete, and Bassili’s honest assessment of institutional uncertainty reflects the current state of this evolution. While Bitcoin and Ethereum have established clear positions in the digital asset hierarchy, the battle for third, fourth, and subsequent positions remains wide open. For investors, this creates both opportunity and complexity, requiring careful analysis of technical capabilities, adoption metrics, and long-term value propositions rather than relying on market capitalization rankings alone.

This post was written after reading Here’s what happened in crypto today. I’ve added my own analysis and perspective.

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