Bitcoin Ethereum Rebound 30% 36% in Q2 2025 Driven by Institutional Interest

Bitcoin and Ethereum have made a significant comeback in the second quarter of 2025, erasing their losses from the first quarter with impressive gains of 30% and 36% respectively. This performance marks their strongest Q2 since the post-COVID rally in 2020, highlighting a notable turnaround from the previous quarter's downturn. As of June 30, Bitcoin is trading near $107,500, while Ethereum is holding around $2,450, both showing strong weekly gains of 6% and 9% respectively.

The first quarter of 2025 was challenging for both cryptocurrencies. Bitcoin fell by 11.82%, and Ethereum experienced an even sharper decline of 45.41%, its worst quarterly performance since the 2022 bear market. The downturn was attributed to trade tensions and geopolitical instability, which created a risk-off environment and pulled capital away from speculative assets, including crypto.

The recovery in Q2 is particularly noteworthy. Ethereum has recovered nearly 80% of its first-quarter losses, while Bitcoin, though not yet at its all-time highs, is trading within reach of that level. Historically, Q4 and Q1 have delivered stronger results for these cryptocurrencies, often tied to end-of-year positioning and early-cycle optimism. Q2 tends to be more volatile, with outcomes often shaped by policy developments and regulatory activity.

The performance in Q2 2025 stands out not just for its scale but for reversing a sharp downtrend from earlier in the year. This recovery has been driven by a steady rise in institutional participation, particularly through spot ETFs. Bitcoin ETFs, led by BlackRock’s IBIT, saw a notable resurgence in investor interest through June, effectively ending a brief period of declining activity. Over 210 million IBIT shares were traded in the week ending June 27, reflecting a 22.2% increase from the previous week and reversing a four-week downtrend in trading volume. This volume recovery has been accompanied by consistent capital inflows, with BlackRock’s IBIT alone attracting $1.31 billion in net inflows last week.

Ethereum ETFs have shown a similar course, albeit on a smaller base. Inflows into spot ETH ETFs climbed to $283 million last week, a sharp rise from the $40 million added the week before. This jump has helped June surpass May and April’s figures, with a total of $1.13 billion entering Ethereum ETFs this month. Over the past seven weeks, ETH ETFs have now recorded uninterrupted weekly inflows, the longest streak since their inception.

Recent moves by institutional leaders and policymakers suggest a shift in how Bitcoin and Ethereum are perceived in modern portfolios. Ric Edelman, founder of a $300 billion advisory firm, has laid out a new investment framework that places crypto in every category of investor allocation. His recommendation proposes that even conservative investors allocate 10% to crypto, with moderate clients going up to 25% and aggressive ones as high as 40%. Edelman’s reasoning is rooted in historical data, showing that portfolios that included Bitcoin have shown stronger returns and lower drawdowns.

MicroStrategy, a prominent institutional investor, acquired another 4,980 BTC at an average price of $106,801 per coin, bringing its total holdings to 597,325 BTC. The firm’s Bitcoin yield year-to-date is nearly 20%. Meanwhile, a Wall Street strategist is backing a $250 million capital raise aimed at transforming a small Bitcoin mining firm into the largest public holder of Ethereum. This plan involves building an Ether-first treasury strategy modeled on MicroStrategy’s Bitcoin approach, confirming growing institutional interest in Ethereum as a core reserve asset.

Heading into Q3, all eyes will be on the Federal Reserve’s July meeting and its response to cooling inflation data. A confirmed rate cut could reinforce risk-on sentiment across markets, with crypto likely to benefit from renewed capital inflows. Traders will also be watching for updates on the U.S. crypto tax bill, enforcement actions, and spot ETF expansion, especially around Ethereum. If ETH ETFs continue attracting steady inflows, Ethereum may begin to close the gap with Bitcoin in institutional portfolios. However, macro events remain unpredictable, and any escalation in global trade tensions could revive volatility. For now, the market is holding its Q2 gains, but sustained momentum will likely depend on a clear rate cut signal and continued institutional positioning.