Bitcoin remains dominant by market cap amid institutional shift to ETH

August recorded crypto fund inflows amounting to $4.37 billion cumulatively, increasing the YTD inflows to $35.5 billion despite falling prices in the crypto market. Throughout the past week, approximately $2.5 billion of crypto funds’ net inflows were recorded, effectively reversing the prior outflows.  

Ethereum ETFs led the market with $1.4 billion in inflows over the past week and $3.95 billion in August, while Bitcoin saw a net outflow of $301 million. The U.S. dominated inflows with $2.29 billion, followed by Switzerland with $109.4 million, Germany with $69.9 million, and Canada with $41.1 million, per CoinShares.

ETH ETFs lead with $1.4B inflows as Bitcoin records $301M outflow

Despite the positive inflow data recorded earlier last week, Friday saw a sharp outflow trend. Some analysts have attributed the trend to profit-taking rather than a market reversal following the release of the Core CPE data on the same day. The Friday CPE data reduced market expectations of a federal rate cut in September, with the PCE price index remaining at 2.6%, the same as in July. The core PCE rose by 2.7% year over year compared to 2.6% from the previous month. 

Ethereum ETFs have received the most inflows throughout August, largely due to institutional inflows. Cryptopolitan reported last month that the ETH token recorded more than $1 billion in inflows in a single day via its three ETFs. BlackRock and Fidelity led among the firms that have shifted to cryptocurrency strategy holdings as an alternative finance tool. 

Institutional investors have an Ethereum exposure of up to 975,650 ETH, which is valued at approximately $2.5 billion. The investment advisor category leads the categories with an exposure of 539,757 ETH according to a report compiled by Bloomberg as of August 27. 

Institutional treasuries such as Bitmine have also increased their holdings. Bitmine added 190,500 ETH, bringing its total holding to 1.7 million ETH. At the current ETH price, Bitmine’s holding is valued at $7.7 billion. Sharplink and the Ether Machine follow closely, with 797,704 and 345,362 ETH holdings, respectively. With the current trend of institutional buys, supply shortages are being driven up. According to CoinShares research, for 1ETH, the Ethereum network issues and treasuries lock up 35.77 ETH, showing how massive the demand massively outpaces supply. 

Bitcoin remains dominant by market cap amid institutional shift to ETH

The trend in institutional buys has supported Ethereum’s relative performance in the past month. Bitcoin recorded a net outflow of $301 million. Despite the massive inflows in Ethereum ETFs, Bitcoin remains dominant in the market share as institutional holdings via treasuries such as MicroStrategy continue to increase. 

Cryptopolitan recently reported on Bitcoin’s market dominance, which has slipped below its recent highs as Ethereum outperforms. Bitcoin has struggled to keep pace with Ethereum, leading to speculations that capital is being rotated out of BTC into other assets. Some analysts noted that it could be a possible ‘altcoin season’. 

Bitcoin is trading at $108,924.50, down 2.1 % over the past week, with a positive YTD of 16.5% the time of writing. ETH has also dropped by 2.4% over the past week and is currently trading at $4,406.03. Bitcoin remains the leading cryptocurrency by market capitalization, currently at $2.16 trillion, followed by Ethereum at $531.34 billion.

The latest fund flows have also been reflected in other projects, such as XRP and Solana, which received inflows of US$177m and US$134m, respectively, in August.

Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.