Bitcoin News Today: Institutional Money Shifts to Ethereum as Bitcoin Faces Turbulence and $550M in Liquidations

Bitcoin faces growing scrutiny as U.S. debt levels and Federal Reserve policies continue to shape market sentiment. Max Keiser, a well-known financial commentator, recently predicted that Bitcoin could reach $2,200,000 in the future, driven by concerns over the trajectory of U.S. debt and potential inflationary pressures. While such a forecast is speculative and attributed to Keiser, it highlights the ongoing debate about Bitcoin’s role as a hedge against fiat currency devaluation [1].

Recent market dynamics reflect volatility in the cryptocurrency space. On the weekend of August 25, 2025, a major flash crash saw Bitcoin plunge below $111,000 after a large whale sold 24,000 BTC, equivalent to over $300 million in value. This sudden selloff triggered over $550 million in liquidations, with $238 million in Bitcoin positions and $216 million in Ether (ETH) wiped out in a single day [2]. The crash erased gains from Fed Chair Jerome Powell’s dovish comments at the Jackson Hole Economic Policy Symposium earlier in the week, which had briefly spurred optimism among investors.

Amid the volatility, Ethereum showed relative resilience, trading at $4,707 as of the following day. Analysts suggest a growing institutional shift in focus from Bitcoin to Ethereum, particularly as the Fed’s potential rate cut is seen as a catalyst for smaller market cap assets to outperform. Ethereum's momentum is further supported by its expanding role in stablecoins, smart contracts, and tokenization, with some analysts suggesting it could serve as a foundational asset for traditional finance [2].

Crypto ETPs, or exchange-traded products, also reflected the turbulence in the market. Last week saw $1.43 billion in outflows from crypto ETPs, marking the largest outflows since March 2025. The decline was most pronounced in Bitcoin ETPs, which experienced over $1 billion in outflows, while Ethereum ETPs saw $440 million in outflows. James Butterfill of CoinShares attributed the sell-off to polarized investor sentiment surrounding U.S. monetary policy, particularly after the Fed’s Jackson Hole speech was interpreted as more dovish than expected [3].

The divergent performance between Bitcoin and Ethereum in ETP flows was notable. Year-to-date, Ethereum has attracted 26% of total ETP inflows, compared to just 11% for Bitcoin, suggesting a growing preference for altcoins among institutional investors. Altcoin flows were mixed, with XRP and Solana seeing inflows, while Sui and Toncoin faced outflows. The contrasting investor behavior underscores the dynamic nature of the cryptocurrency market and the influence of macroeconomic factors on digital asset valuations [3].

The recent price swings highlight the fragility of leveraged positions in the crypto market. When large moves occur against open positions, exchanges execute liquidations to manage risk. This mechanism, while necessary, can amplify short-term volatility and reset market sentiment. The flash crash and subsequent stabilization of Bitcoin near $112,800 illustrate the high-stakes nature of trading in the digital asset space, where liquidity and positioning can rapidly shift in response to macroeconomic events and whale activity [2].

Source:

[1] Max Keiser (https://www.maxkeiser.com)

[2] Bitcoin Flash Crash Triggers $550M in Sunday Liquidations as Ether Rotation Builds (https://www.coindesk.com/markets/2025/08/25/bitcoin-flash-crash-triggers-usd550m-in-sunday-liquidations-as-ether-rotation-builds)

[3] Crypto ETPs post $1.4B losses amid recent Bitcoin, Ether selloff (https://cointelegraph.com/news/crypto-funds-1-4-billion-outflows-bitcoin-ethereum)