Why Most Ethereum Layer 2s Are About to Disappear w/ Eliezer Ndinga

Watch on YouTube ↗  |  January 09, 2026 at 19:45  |  34:39  |  Milk Road Daily
Speakers
Eli Ndinga — Global Head of Research, 21Shares
LG Ducat — Host, Milk Road Show

Summary

Eliezer Ndinga, Global Head of Research at 21Shares, joins The Milk Road Show to discuss the firm's 2026 crypto outlook. He argues most Ethereum Layer 2s will not survive consolidation, which should benefit Ethereum itself, and highlights Canton Network as an institution-friendly privacy rail. The conversation also covers the shift from infrastructure to consumer applications, risks in digital asset treasuries versus crypto ETFs, and why Bitcoin's four-year cycle may be broken and could support a bullish 2026.

  • Most Ethereum Layer 2s face a consolidation cycle; many may fail or pivot.
  • The speaker sees L2 consolidation as positive for Ethereum and its base-layer roadmap.
  • Canton Network is highlighted as an institutional-friendly privacy-focused L1 for tokenization.
  • The investment focus is shifting from crypto infrastructure to consumer applications.
  • Digital asset treasuries are seen as risky levered vehicles; crypto ETFs are preferred.
  • Bitcoin's four-year cycle is described as broken, with ETF demand supporting a bullish 2026 view.
  • Bitcoin is also framed as a portfolio diversifier and hedge against counterparty risk.
Ideas
Eli Ndinga Global Head of Research, 21Shares 0:00
Most Ethereum Layer 2s won't survive.
The Layer 2 market has too many scaling solutions and is entering a consolidation phase. Crypto has shifted from infrastructure buildout to go-to-market integration, creating intense competition; many Ethereum Layer 2s will fail to find users, require pivots, or disappear, although exchange-backed or differentiated networks may survive.
Ethereum Layer 2s HIGH
Eli Ndinga Global Head of Research, 21Shares 4:49
L2 consolidation is good for Ethereum.
Layer 2 consolidation is good for Ethereum. Ethereum has changed its roadmap from relying mainly on L2s to making the base layer more accommodating; recent upgrades cut fees and helped drive a roughly 1,000% quarterly increase in contract deployments and new applications, supporting a bright future.
ETH HIGH
Eli Ndinga Global Head of Research, 21Shares 8:07
Coinbase stock offers Base exposure.
Base is a notable Ethereum Layer 2 without its own token, so Coinbase stock is one public-market route for investors seeking exposure to Base as the L2 market consolidates.
COIN LOW
Eli Ndinga Global Head of Research, 21Shares 10:04
Consumer crypto apps are next 10x.
The infrastructure trade is largely behind crypto, and the next large returns are likely in consumer applications built on blockchain rails, especially in private markets. These apps can reach mainstream users without them realizing they are using crypto, so the consumer application vertical is the exciting place for investors to focus.
Crypto consumer applications MED
Eli Ndinga Global Head of Research, 21Shares 11:48
Prefer crypto ETFs over DATs.
Digital asset treasuries are levered crypto equity vehicles that can trade below mNAV, forcing debt raises or asset sales and creating risks for equity holders; consolidation is likely. Crypto ETFs are preferable because they provide structured, liquid, direct exposure to underlying crypto assets and are where pent-up demand is concentrated, especially in the US and Europe.
Crypto ETFs HIGH
Eli Ndinga Global Head of Research, 21Shares 11:48
Prefer crypto ETFs over DATs.
Digital asset treasuries are levered crypto equity vehicles that can trade below mNAV, forcing debt raises or asset sales and creating risks for equity holders; consolidation is likely. Crypto ETFs are preferable because they provide structured, liquid, direct exposure to underlying crypto assets and are where pent-up demand is concentrated, especially in the US and Europe.
Digital asset treasuries (DATs) HIGH
Eli Ndinga Global Head of Research, 21Shares 17:19
Canton is institutional-friendly privacy rail.
Canton Network is well positioned to be an institutional-friendly Layer 1 for tokenization because it combines public blockchain technology with privacy and control. It has strong institutional backing, JPMorgan plans to launch its coin on Canton, and institutions need private proof-of-concepts to protect IP while adopting tokenization.
CANTON HIGH
Eli Ndinga Global Head of Research, 21Shares 21:11
Broken four-year cycle makes 2026 bullish.
Bitcoin has matured and the four-year halving cycle is broken. Price is increasingly driven by demand through financial services and crypto ETFs rather than supply cuts, and today's drawdown lacks the structural drivers of past crypto winters such as fraud, regulatory crackdowns, or monetary tightening, making a bullish 2026 more likely.
BTC HIGH
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This Milk Road Daily video, published January 09, 2026, features Eli Ndinga discussing Ethereum Layer 2s, ETH, COIN, Crypto consumer applications, Crypto ETFs, Digital asset treasuries (DATs), CANTON, BTC. 8 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Eli Ndinga  · Tickers: Ethereum Layer 2s, ETH, COIN, Crypto consumer applications, Crypto ETFs, Digital asset treasuries (DATs), CANTON, BTC