There are many moving parts in the cryptocurrency industry right now. The entire industry is in a deep bear market, and the recent collapse of FTX is potentially setting back crypto's progress as an asset class and damaging investor confidence.

Ethereum has long been a staple in crypto, while Solana (SOL 5.06%) was a high-riser from 2022 until recently. The smoke must clear in the crypto market, but risk-tolerant investors with patience could realize long-term returns by buying cryptos at these depressed levels. Both cryptos could see prices rebound eventually, but only one seems like a clear buy today.

The rise and fall of Solana

Solana burst onto the scene after its launch in 2020 and quickly became one of the hottest cryptocurrencies around, appreciating nearly 30,000% in less than two years.

FTX founder Sam Bankman-Fried was a big supporter of Solana. FTX, which was a major crypto exchange, held $1.2 billion in Solana on its balance sheet before the company's bankruptcy, and Bankman-Fried called Solana the "most underrated token" earlier this year.

It's possible that Bankman-Fried's fame in the crypto industry helped fuel excitement for Solana, and the staggering returns only brought in more investors. After all, we're all human, and emotions can get the best of us. However, the collapse of FTX could have some severe side effects for Solana as a whole. The price effect has already been felt; the token's price is down 59% in the past month and 94% from its high.

But long-term, Bankman-Fried's sudden fall from grace could affect Solana's credibility by association. A token's value primarily depends on its demand, and whether FTX's collapse will push developers to build applications on other blockchains remains to be seen.

Ethereum is getting an upgrade

The events in crypto aren't limited to Solana. Ethereum is down 75% from its peak, despite its standing as the second-largest cryptocurrency. But Ethereum's decline might be more a market function than a fundamental flaw.

Ethereum has a longer history than Solana; it started in 2015. It's also the most popular blockchain for developers, with an estimated 4,000 monthly active developers building on it. That's compared to about 1,000 on Solana (at the time of the report) and 500 on Bitcoin. As I said above, adoption is critical in crypto, and Ethereum is strong there.

Ethereum is also performing upgrades that could make it even more attractive to developers. One of Ethereum's most significant problems was its proof-of-work model for securing and verifying transactions. This model needs a ton of computer processing power, which creates traffic jams and high fees when there are a lot of transactions. To solve this, Ethereum moved to proof-of-stake and created Ethereum 2.0, a new blockchain that doesn't require nearly as much energy. The formal upgrade, or The Merge as it was called, took place in September. 

Additionally, Ethereum in the latter half of 2023 is expected to introduce what's known as sharding, which splits the blockchain into smaller segments, essentially spreading the workload to operate the blockchain.

These efforts could enable Ethereum to handle many more transactions. Different cryptocurrencies have different abilities, but Ethereum's widespread use could make it more appealing to developers now that there are trust issues in the broader industry.

Ethereum is the better buy today

"Trust" is the important word here. Solana has some impressive abilities, including its speed and cheap transaction fees. But this crypto, which once was called a potential Ethereum killer now seems like it must rebuild its credibility in light of FTX's collapse. That isn't necessarily Solana's fault, but the perception of guilt by association is a thing, and perception can sometimes affect reality.

Investors looking to buy crypto today should consider Ethereum for its long history, widespread developer support, and recent technology improvements. Solana should probably be considered more speculative until there's a clearer sense of how the cryptocurrency community treats it once it moves past the doubts spawned by FTX's sudden collapse.