Bitcoin News Today: Bitcoin Loses Edge, Ethereum Steals Spotlight in Risk-Driven Bets

Bitcoin’s volatility has plummeted in recent years, dropping to an annualized 38% from nearly 200% over a decade ago, making it more akin to blue-chip stocks such as Starbucks Corp. or Goldman Sachs Group Inc. This shift has prompted speculative traders, who previously thrived on Bitcoin’s wild price swings, to seek out higher-volatility assets such as Ethereum. Ether, the second-largest cryptocurrency by market cap, has absorbed much of this trading activity, with its ETF volumes in several days this month rivaling or surpassing those of Bitcoin. The trend underscores a growing divergence in investor behavior between the two leading digital assets [1].

The shift is also reflected in recent capital flows. So far in August, Ether ETFs have attracted $2.5 billion in inflows, while Bitcoin ETFs have seen net outflows of $1.3 billion. BlackRock’s Ether ETF, launched in April, already accounts for $5.5 billion in open options positions, roughly 40% of the amount seen on crypto derivatives platform Deribit. This suggests that Ethereum is becoming the preferred vehicle for traders seeking sharper price movements, while Bitcoin increasingly is viewed as a long-term store of value. Analysts such as Jeff Dorman of Arca note that most trading activity is now concentrated in Bitcoin and Ether, but the motivations differ: Bitcoin’s story has largely played out, while Ethereum still feels under-owned, more volatile, and more reactive to macroeconomic developments [1].

Ethereum’s recent rally was fueled by optimism around Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole Symposium, where he left the door open for a rate cut in September. Ether surged more than 12% to around $4,750 on the news, outperforming Bitcoin, which rose approximately 3% to $116,170. The divergence in performance highlights Ethereum’s heightened sensitivity to interest rate expectations and its continued role as a bellwether for risk appetite in the crypto space. Bradley Duke of Bitwise noted that Ethereum is moving into a risk-off sentiment, with some funds preparing for a potential pullback, particularly if leveraged positions unwind. Arthur Azizov of B2 Ventures warned that Ether may consolidate between $3,900 and $4,400, with a drop to the low $3,000s a possibility if leveraged bets start to reverse [1].

Bitcoin, in contrast, faces a critical test with a $13.8 billion options expiry on August 29, which traders view as a key inflection point for the market. Open interest for put (sell) options exceeds call (buy) contracts, suggesting bearish pressure ahead of the expiry. The outcome may hinge on broader macroeconomic developments, including the Fed’s policy stance and investor sentiment toward the artificial intelligence sector. Analysts warn that any unexpected inflationary pressures or a slower-than-anticipated rate-cut timeline could prolong the bearish momentum. Bitcoin bulls will need the price to settle above $116,000 by expiry for their positions to gain traction, but the most critical battleground lies at $114,000, where bears have the most concentrated short positions [3].

The market’s diverging dynamics have also led to unusual activity from large holders of Bitcoin. One major whale, who has held Bitcoin for seven years, recently sold 670 BTC for $76 million and used the funds to open a leveraged long position in Ethereum worth $295 million. This move, which came as Bitcoin neared an all-time high of $124,128, reflects a broader trend of Bitcoin holders diversifying into Ethereum amid its strengthening fundamentals and growing institutional adoption. Meanwhile, Ethereum’s price action has drawn attention to key support and resistance levels, with traders closely watching whether it can reclaim its 2021 peak of $4,878 [8]. The growing interplay between macroeconomic expectations, institutional flows, and on-chain activity will likely shape the trajectory of both assets in the coming weeks.

Source: [1] Bitcoin-volatility collapse forces risk-loving traders elsewhere (https://finance.yahoo.com/news/bitcoin-volatility-collapse-forces-risk-112008080.html) [2] Bitcoin and Crypto Stocks Surge as Powell's Rate-Cut Hint ... (https://www.investopedia.com/bitcoin-and-crypto-stocks-surge-as-powell-rate-cut-hint-revives-risk-appetite-11795898) [3] Bitcoin Bull Market Hinges On $13.8 Billion Options Expiry (https://cointelegraph.com/news/bitcoin-s-13-8b-options-expiry-puts-bulls-on-edge-ahead-of-key-test) [4] Why Ethereum Jumped 13% Today (https://www.fool.com/investing/2025/08/22/why-ethereum-jumped-13-today/) [5] Ethereum, Bitcoin Spike After Powell Signals Interest Rate Cut (https://finance.yahoo.com/news/ethereum-bitcoin-spike-powell-signals-143138288.html) [6] Bitcoin, Ethereum, XRP Headed For September Crash? Watch ... (https://finance.yahoo.com/news/bitcoin-ethereum-xrp-headed-september-183105221.html) [7] Top 3 Price Prediction: Bitcoin, Ethereum, Ripple – BTC ... (https://www.fxstreet.com/cryptocurrencies/news/top-3-price-prediction-bitcoin-ethereum-ripple-btc-eth-and-xrp-could-face-volatility-as-markets-eye-powell-at-jackson-hole-202508220408) [8] Bitcoin Whale Shifts to ETH With $295 Million Long Position (https://cointelegraph.com/news/bitcoin-whale-dumps-btc-for-295m-eth-long-position)