Bitcoin Declines Amid Shift to Ethereum as Major Holders Reduce Holdings

Bitcoin's price dropped 2.12% to $112,692 after a brief rebound, with analysts attributing the movement to major holders shifting their positions from Bitcoin to Ethereum. Ethereum's price is around $4,712, having reached a record high of over $4,946 last Friday. Spot ETF flows indicate significant inflows into Ethereum ETFs since August, while Bitcoin ETFs have seen minimal inflows or outflows. Ethereum is expected to become the market focus with the anticipated approval of Ethereum ETF staking features.

Bitcoin's price dropped 2.12% to $112,692 after a brief rebound, with analysts attributing the movement to major holders shifting their positions from Bitcoin to Ethereum. Ethereum's price is around $4,712, having reached a record high of over $4,946 last Friday. Spot ETF flows indicate significant inflows into Ethereum ETFs since August, while Bitcoin ETFs have seen minimal inflows or outflows. Ethereum is expected to become the market focus with the anticipated approval of Ethereum ETF staking features.

The last stretch of August has produced a sharp divergence between spot Bitcoin and Ethereum ETFs. Bitcoin ETFs recorded six consecutive days of outflows, draining nearly $2 billion from funds between Aug. 19 and Aug. 22 alone [1]. In contrast, Ethereum ETFs posted two days of inflows after enduring several red sessions, indicating that investor interest spiked during ETH’s latest price upswing. Between Aug. 19 and Aug. 22, spot Bitcoin ETFs saw heavy and unrelenting redemptions. The biggest wave came on Aug. 19, with a combined $523 million in outflows led by Fidelity’s FBTC (-$246.9 million) and BlackRock’s IBIT (-$220 million) [1]. The pressure extended into Aug. 20 with another $315.9 million pulled, followed by $194.4 million on Aug. 21 and $23.2 million on Aug. 22 [1].

This six-day streak is one of the most prolonged outflow runs this summer, with cumulative redemptions exceeding $1.3 billion in less than a week. The flows aligned with a cooling in Bitcoin’s spot market: BTC slid from $114,300 on Aug. 20 to $111,600 by Aug. 25. The ETF data shows us institutional demand waned almost exactly when BTC faced technical resistance above $117,000 and struggled to hold $113,000 support [1].

Ethereum ETFs saw a different trajectory in the past week. After multiple days of outflows, culminating in a $240 million outflow on Aug. 20, funds flipped positive. On Aug. 21, ETH ETFs attracted $287.6 million, followed by another $337.7 million on Aug. 22. Fidelity’s FETH and BlackRock’s ETHA were the primary drivers, with combined inflows exceeding $240 million across the two sessions [1]. As with Bitcoin, this capital rotation mirrored ETH’s price performance. After dipping to $4,225 on Aug. 21, Ethereum surged above $4,800 by Aug. 22, peaking intraday near $4,883. While Bitcoin faltered, ETH drew inflows as traders positioned around its stronger short-term momentum [1].

The split in flows points to shifting allocation preferences. Bitcoin’s six-day outflow streak tells us institutions are trimming exposure after months of heavy inflows earlier in the summer. At the same time, ETH’s sudden inflows suggest that investors might not be exiting crypto altogether but reallocating within the asset class [1]. The timing here is key: ETH’s rebound caused the inflows, indicating that ETF demand was a tailwind for price, while Bitcoin’s ETF redemptions reinforced downside pressure [1].

The anticipated approval of Ethereum ETF staking features could further boost Ethereum's attractiveness to institutional investors. VanEck’s filing of the first spot JitoSOL ETF, which is fully backed by the liquid staking token JitoSOL, marks a regulatory milestone that could expand institutional access to staked SOL and boost liquidity and tax clarity for Solana staking products [2]. This move signals a potential mainstreaming of LST-backed ETFs and could have broader implications for the crypto market.

Ethereum faces a critical juncture in August 2025, with $8.2 billion ETF inflows and 5.31% circulating supply held by ETFs, yet prices remain below $5,000 [3]. Institutional adoption grows via staking yields (3-7%), energy-efficient post-Merge upgrades, and $1.6 billion corporate treasury allocations leveraging smart contracts [3]. Risks include overheating (RSI 66.6), regulatory delays, and competition from Solana/Cardano, which threaten Ethereum's market share and valuation [3]. Strategic positioning recommends diversifying crypto holdings, monitoring burn rates/TVL, and using derivatives to hedge as the market balances momentum with caution [3].

References:
[1] https://cryptoslate.com/insights/six-day-outflow-streak-hits-bitcoin-etfs-eth-turns-positive/
[2] https://en.coinotag.com/vaneck-jitosol-spot-etf-filing-could-boost-solana-staking-liquidity-jto-faces-2-resistance/
[3] https://www.ainvest.com/news/ethereum-tipping-point-navigating-bull-case-bear-risks-etf-inflows-meet-overheated-valuations-2508/