Ether (ETH) is gaining ground against bitcoin (BTC), reflecting a shift in investment dynamics. There is an increasing flow of capital into ETH, driven by institutional and technical factors. Ethereum's momentum is supported by net inflows into spot ether ETFs, which have seen positive inflows since April.
Ethereum ETF performance over the past year, month by month. Source: Soso Value.
In July, these reached $5 billion, close to matching the $6 billion held by Bitcoin ETFs. Last week, Ethereum ETFs attracted $1.85 billion versus $73 million for Bitcoin, marking 11 consecutive weeks of positive inflows. “This divergence reflects strong demand for ETH, despite its smaller size,” says analyst Mandela Amoussou.
Institutional adoption boosts Ethereum
Another key catalyst is the adoption of Ethereum as a corporate treasury asset. Publicly traded companies currently hold 2.57 million ETH worth $9.7 billion, with recent funding rounds aimed at increasing these reserves.
This trend reinforces Ethereum's perception as a solid institutional asset, attracting both retail and institutional investors. "ETH's recovery isn't just technical; it's backed by real capital," says Amoussou.
Relative strength against bitcoin
Furthermore, the ETH/BTC pair, an indicator of Ethereum's relative strength, has reversed its downtrend. From a yearly low of 0.0176 BTC per ETH in April, it has risen to 0.032 BTC, after starting the year at 0.036 BTC. This rally signals a capital rotation from Bitcoin to Ethereum, a phenomenon that, according to Amoussou, typically precedes a broader cryptocurrency rally. “When ETH/BTC rises, it indicates a change in sentiment and a greater appetite for risk,” he explains.
Not all analysts share this view. Carmelo Alemán argues that Bitcoin's realized market capitalization, which reached an all-time high of $1.018 trillion, suggests that BTC capital is continuing to grow, not migrating en masse to Ethereum. This metric, based on the price at which each BTC unit moved, challenges the narrative of a significant rotation. However, Amoussou insists that ETH's strength, despite, according to him, capital rotation, has its own foundations, not just speculative ones. "Without this foundation, the rally would seem like a passing fad," he adds.
Possible risks
Despite the optimism, uncertainty persists. The August 1 deadline for the tariff truce, following trade tensions between the US and China, could generate short-term volatility for Ethereum and its ETFs.
Although a trade agreement with the European Union has eased concerns, Amoussou warns that a tariff escalation could impact the market. Still, he asserts that "underlying demand for ETH is strengthening, with limited macroeconomic risks outside of tariffs."
The data supports Ethereum's bullish narrative. The combination of record ETF inflows, corporate adoption, and favorable momentum against Bitcoin positions ETH as a key asset. “Ethereum has always led cryptocurrency rallies, and this time seems to be no exception,” Amoussou concludes. For investors, ETH's current strength makes it an attractive option.
