- Layer 2 tokens like $ARB and $OP lag in price despite tech strength, as institutions show limited interest this cycle.
- Restaking tokens such as $LDO and $ETHFI remain range bound, with weak momentum and muted institutional engagement.
- Capital now flows to BTC, ETH, SOL, and meme coins like DOGE and PEPE, driven by stronger liquidity and upside potential.
Layer 2 and restaking tokens are losing strength as institutional focus shifts elsewhere, according to insights from a recent X post. While Layer 2s like Arbitrum, Optimism, and ZKSync offer strong technology, they have failed to attract institutional capital.
These platforms continue powering parts of the Ethereum ecosystem, but that hasn’t translated to token growth. Arbitrum and Optimism support chains like Base, yet their native assets show limited price action.
Similarly, restaking projects such as Lido and EtherFi remain stuck in stagnant ranges, with little sign of performance gains.
Layer 2 Tokens Lack Institutional Interest and Price Action
Despite offering backend infrastructure for Ethereum scaling, Layer 2 tokens have not seen real support in the market. Coins like ARB, OP, and ZK remain largely sidelined by institutions.
Even with solid SaaS based structures, Arbitrum and Optimism are viewed as lacking upside potential. These projects support major platforms like Coinbase’s Base, yet institutional buyers continue to overlook them.
That absence of interest shows on their underperformance. Notably, even brief rallies have failed to change the overall moves. These coins have not kept up with major Layer 1 performers or ETH itself, reducing their appeal for capital allocation.
Restaking Sector Struggles to Build Momentum
Restaking tokens also face similar challenges in gaining market attention or returns. LDO, the most established staking provider, has remained in a flat trading range for months.
Newer entrants like ETHFI, Renzo, and Swell follow the Eigenlayer model but still lack momentum. The broader restaking narrative built around yield utility has not gained widespread attention.
Despite offering layered staking services, these projects see little engagement from institutional players. Their token performance shows the narrative’s slow uptake. With both price action and investor sentiment muted, the sector struggles to show long term value.
Focus on Higher Conviction Longs on BTC, ETH, and Select Altcoins
While L2s and restaking lag, attention has shifted toward assets showing stronger momentum. The current long positions include BTC (5x), ETH (3x), and major altcoins like SOL, DOGE, and PEPE.
Other leveraged plays include XRP, ADA, TRX, and BNB, each positioned for potential upside with 3x exposure. The list also features tokens like TAO, HYPE, and SUPER, indicating a lean toward higher conviction bets. These selections show a clear move toward assets with better institutional exposure, liquidity, and current market strength.
Altogether, Layer 2s and restaking tokens face diminishing interest this cycle. The focus now is on primary Layer 1s and meme driven assets with stronger upside and clearer momentum.
