Bitcoin’s six-week rally has come to an end as institutions are now focusing on Ethereum. The rise of Ethereum can be attributed to its newfound popularity among corporate investors who see its blockchain technology as more versatile than Bitcoin’s. Ethereum’s ability to support smart contracts and decentralized applications make it more attractive to businesses than Bitcoin. As institutional interest in Ethereum grows, its market cap is expected to increase beyond its current $200 billion.
Bitcoin’s losing streak in terms of outflows from digital asset investment products continued last week, with investors pulling out $53.1 million. Digital asset investment firm CoinShares blames profit-taking for the dip, with few macroeconomic factors affecting BTC’s price. CoinGecko reported that Bitcoin was sliding towards $27,000, down 9% from the previous week. The proof-of-stake (PoS) upgrade, dubbed “Shapella,” seems to have bolstered Ethereum’s confidence, with inflows of $17 million. Investors may be emboldened now that validators on ETH’s PoS network can withdraw staked ETH if needed. James Butterfill, CoinShares head of research, also revealed that all inflows to ETH-based funds came from Europe. This trend coincides with landmark cryptocurrency legislation passed in the region, which may have boosted investor sentiment.
Bitcoin’s continental divide was also made clear in the report, with most profit-taking occurring in North America. CoinShares said the “optimistic sentiment in Germany” may have offset this, with inflows totalling $29 million. This positive outlook is likely due to Germany’s friendly tax regime, which exempts cryptocurrencies offloaded after 12 months from capital gains tax. Overall, digital asset investment products saw total outflows of $30 million in the week, with CoinShares XBT, ProShares, and 3iQ being the hardest-hit providers. These providers manage exchange-traded products pegged to cryptocurrencies, which allows institutional investors to gain exposure to the crypto markets indirectly without holding it. Despite these challenges, Ethereum’s success in attracting inflows amid the slump underscores its growing popularity as an alternative to Bitcoin.
1. Bitcoin Outflows Hit $53.1 Million- Investors Take Profit amid Lack of Macroeconomic Triggers
2. Ethereum Bucks the Trend with $17 Million Inflows Amid Bitcoin Slump