Answer Box
Solana (SOL) has historically been a better portfolio diversifier than ether (ETH), despite higher volatility, according to a new analysis by Morgan Stanley Wealth Management. Over the four years through April 2026, SOL's correlation with bitcoin was 0.72, lower than ether's 0.78, and SOL also showed a slightly lower correlation with the S&P 500 Index. The findings come as the crypto market expands beyond bitcoin, with spot ETPs for bitcoin, ether and SOL now available.
SOL vs. ETH as a portfolio diversifier
Morgan Stanley executive director Denny Galindo, writing in CoinDesk's Crypto Long & Short newsletter, examined the diversification benefits of adding ether or SOL alongside bitcoin in a portfolio. Since the start of 2026, ether has been about 35% more volatile than bitcoin, while SOL has been roughly 44% more volatile. But volatility alone does not determine diversification; correlation matters more.
Galindo found that SOL had a lower correlation with bitcoin (0.72) than ether did (0.78) over the four-year period through April 2026. More critically, when SOL did not move in tandem with bitcoin, it was less likely than ether to move in the same direction as equities. SOL's correlation with the S&P 500 was slightly lower than both bitcoin's and ether's. This suggests that adding SOL could provide a greater diversification benefit than adding ether, even though SOL is more volatile.
Why investors hold crypto beyond bitcoin
Galindo outlined three main motivations for holding digital assets. Investors who view crypto as digital gold tend to prefer bitcoin alone. Those focused on blockchain adoption and financial disruption may want exposure to bitcoin, ether and SOL, as each targets different addressable markets. Investors primarily seeking diversification might consider either a bitcoin-only portfolio or a combination of bitcoin and SOL.
Galindo stressed that historical relationships may not persist and that past diversification characteristics are not guarantees of future results. He also noted that diversification does not eliminate the risk of loss. The analysis does not constitute a recommendation to buy, sell or hold any asset.
Infrastructure and regulatory developments
In other news, Circle received final approval from the U.S. Office of the Comptroller of the Currency for a federally regulated trust bank, placing Circle National Trust under direct federal supervision. The trust will initially support custody for Circle and its affiliates, with plans to serve a limited number of regulated institutions later.
Swift is preparing live tests of a blockchain-based shared ledger with 17 global banks, including Citi, HSBC, UBS and Wells Fargo. The system aims to enable 24/7 cross-border payments using tokenized deposits while retaining existing settlement and compliance controls.
The U.S. Securities and Exchange Commission is expected to propose a broad crypto rule as soon as this month, covering fundraising and potential regulatory exemptions. The proposal could reduce legal uncertainty for tokenized securities and other institutional onchain products.
Strategy sells bitcoin, Russia's Sberbank plans crypto wallet
Strategy, the corporate bitcoin holder formerly known as MicroStrategy, sold approximately 3,588 bitcoin for about $216 million to replenish dollar reserves used for preferred-stock dividends. The sale marks a further departure from the company's long-standing "HODL" strategy, demonstrating that its BTC holdings are now being used as active balance-sheet liquidity.
Russia's largest bank, Sberbank, plans to add a crypto wallet and digital custody services to its Sberbank Online and SberInvestments platforms by December, pending implementation of Russia's new digital-asset legislation.
Chart of the Week: Robinhood Chain's DEX volume
Robinhood Chain, an Arbitrum-based layer-2 network, launched its public mainnet on July 1. Over the trailing seven days, it has recorded roughly $690 million in average daily DEX and aggregator volume, peaking at $943.6 million on July 11. Uniswap dominates the chain's activity, accounting for 99.5% of that volume.