Institutional investors are pivoting focus from Layer 2 and restaking tokens toward high-liquidity assets including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and meme coins such as Dogecoin (DOGE) and PEPE. This strategic reallocation highlights a significant trend favoring assets with stronger market momentum and long-term growth potential, driven by current market conditions.
Layer 2 tokens like ARB, OP, and ZK, alongside restaking tokens including LDO and ETHFI, are experiencing underperformance due to weak price momentum and dwindling institutional interest. Investors have cited concerns over scalability challenges and diminished returns compared to broader market alternatives.
Bitcoin, Ethereum, Solana, and meme coins are now favored for their robust liquidity and upward trajectory, with institutions increasingly taking leveraged positions to capitalize on volatility. Meme coins, including DOGE and PEPE, are gaining unprecedented institutional attention as enhanced liquidity profiles and sustained market strength make them viable tactical assets within diversified crypto portfolios.
This shift underscores a broader industry move toward assets with proven market resilience and established institutional backing, rather than emerging Layer 2 or restaking protocols. Capital redirection toward foundational Layer 1 tokens and meme-fueled altcoins signals a maturing institutional approach to cryptocurrency investment strategies.