Bitcoin rose above $64,000 following weaker-than-expected US CPI and PPI data. However, further gains are limited due to simultaneous selling by both long-term and short-term investors.
While Bitcoin, Ethereum, and altcoins are also experiencing gains, noteworthy statements have come from the US banking giant Morgan Stanley.
At this point, a Morgan Stanley analyst compared Solana to Ethereum, the largest altcoin.
And here, SOL has historically been highlighted as a better diversification tool than ETH.
Speaking to Coindesk, Morgan Stanley investment strategist Denny Galindo argued that Solana has historically been a superior diversification asset compared to Ethereum.
Galindo notes that with the rise of spot Bitcoin ETFs, followed by Ethereum and Solana ETFs, the question of which digital assets investors should include in their portfolios alongside Bitcoin has come to the forefront.
Galindo also stated that the correlation coefficient between Bitcoin and ETH is 0.78 until April 2026, while the correlation between Bitcoin and SOL is 0.72, explaining that the BTC-SOL correlation is lower.
According to the analyst, this suggests that Solana is slightly less likely to move in the same direction as Bitcoin. The lower correlation indicates a higher probability of Solana moving independently of Bitcoin, and therefore contributing more to portfolio diversification.
The analyst also notes that Solana’s correlation with the S&P 500 is slightly lower compared to Bitcoin and Ethereum.
Based on these historical correlations, Galindo concluded that SOL could be a better diversification asset than ETH. However, the analyst pointed out that Solana has higher price volatility than Ethereum, and investors should consider this risk factor when evaluating the diversification advantage.
*This is not investment advice.
