Record-breaking $2.9 billion pours into Ethereum Exchange-Traded Funds, sparking debate: Is Ethereum's recent dip a sign for buying opportunities?

In the ever-evolving world of cryptocurrency, a significant shift has been taking place this year, with Ethereum (ETH) outperforming Bitcoin (BTC) in several key areas.

Currently, Ethereum is posting impressive returns while Bitcoin is experiencing red monthly returns. This trend is evident in the Ethereum/Bitcoin (ETH/BTC) ratio, which has surged over 70% since May, indicating Ethereum's growing capital dominance.

This surge is not limited to spot flows. Derivatives liquidity is also rotating heavily into Ethereum, suggesting a broader shift in the market's sentiment towards the second-largest cryptocurrency.

According to data from CoinShares and TradingView, Ethereum has seen a 100%+ increase since May, while Bitcoin is only up around +20%. Open Interest for Ethereum derivatives has hit a record $65 billion, surpassing Bitcoin's figures.

Ether is currently the capital magnet in the market, with both ETFs and spot flows backing its dominance. In a risk-on setup, money is chasing Ethereum, with both spot and leveraged flows stacking up on ETH. Spot ETH ETFs have hit $17 billion in weekly volume, part of a $40 billion combined BTC and ETH ETF grind.

Several factors are contributing to Ethereum's capital dominance over Bitcoin in parts of 2025. Institutional inflows and ETF investments have been historically strong, with major financial institutions leading these investments. Ethereum serves as the foundational platform for decentralized finance (DeFi), NFTs, and smart contracts, driving demand through actual network usage and developer activity.

Trend Research highlights that institutional demand for Ethereum far outpaces its unstaked supply, creating a significant supply shortage likely to pressure ETH's price upward. This supply constraint amplifies Ethereum’s capitalization growth potential compared to Bitcoin, which has a more stable supply-demand profile.

Despite Bitcoin’s current correction from previous highs, Ethereum maintains a strong uptrend in price charts, often showing bullish divergences shortly after Bitcoin market tops. The ETH/BTC ratio has recently reached multi-month highs, suggesting Ethereum is reclaiming market share relative to Bitcoin.

Analysts and Ethereum co-founders predict the possibility of Ethereum overtaking Bitcoin’s market capitalization within one to two market cycles due to these trends. However, Bitcoin remains dominant by market cap, about five times larger than Ethereum’s as of August 2025, supported by its entrenched status as a macro hedge, broader institutional adoption, and fixed supply structural tailwinds, including the 2025 halving event.

In the first two weeks of the month, Ethereum pulled nearly $10 billion in leverage, while Bitcoin barely moved the needle with a $1 billion inflow. Last week, Ethereum ETFs drove $2.9 billion of $3.75 billion in crypto ETP inflows.

Ethereum's recent 4% dip may be more of a shakeout than a trend reversal, offering a potential prime entry point for upside in 2025. The dominance of Ethereum has increased, with ETH.D rising from 8% to 14% since May, while BTC.D has slipped from 60% to 59%.

In summary, Ethereum’s capital dominance over Bitcoin in recent periods is primarily due to its expanding utility, unprecedented institutional inflows, positive price momentum, and supply-demand imbalances. These together contribute to a market narrative where Ethereum is seen as increasingly valuable alongside—and potentially relative to—Bitcoin, even as Bitcoin retains its foundational role as the flagship cryptocurrency.

Record-breaking $2.9 billion pours into Ethereum Exchange-Traded Funds, sparking debate: Is Ethereum's recent dip a sign for buying opportunities?