Ethereum News Today: Ether's Rise Spells Trouble for Bitcoin's Dominance as Capital Flows Shift

Bitcoin is at risk of a liquidation cascade as capital continues to rotate into Ethereum, according to recent market data and analysis. The latest developments show that Ether (ETH) is experiencing robust inflows, with institutional and corporate treasuries actively contributing to the shift. Analysts such as Willy Woo have highlighted that Ether inflows have reached approximately $900 million per day, nearing the levels seen for Bitcoin (BTC) inflows. This trend has been driven, in part, by large-scale accumulation efforts by companies like BitMine, an Ethereum-focused treasury firm, which has acquired 1.7 million ETH valued at $7.9 billion. BitMine’s actions have not only boosted Ethereum’s market share but also altered the traditional capital allocation dynamics within the crypto space.

Ethereum’s market dominance has increased significantly, with its market share rising to 14.57% in late August, up from a low of 7% in April. Conversely, Bitcoin’s dominance has declined from a peak of 66% in June to around 58%. This shift signals a broader reallocation of capital from Bitcoin to Ethereum and other altcoins, with corporate and institutional investors favoring Ethereum’s growing utility in smart contracts and decentralized finance (DeFi). The shift has also been supported by rising inflows into U.S. spot Ethereum exchange-traded funds (ETFs), which have added $2.8 billion in August alone. Additionally, the increased activity in Ethereum treasury trading volumes has outpaced that of Bitcoin, reinforcing the notion of a structural rotation within the crypto market.

The capital rotation has also been reflected in the behavior of “whale” investors—large holders of cryptocurrency—who have been buying hundreds of millions of dollars worth of Ether. According to blockchain data platforms like Arkham and Nansen, nine major Ethereum whale addresses acquired $456 million of ETH from BitGo and Galaxy Digital. Analysts have described this as a “natural rotation” of capital, with investors locking in profits from Bitcoin and redirecting them toward altcoins perceived to have more upside potential. Nicolai Sondergaard of Nansen noted that Ethereum is particularly benefiting from its strong momentum and increased mindshare among institutional investors. This trend has been further supported by the success of smart money traders, who have been acquiring tokens such as Chainlink (LINK), Ethena (ENA), and Lido DAO (LDO), signaling a broader shift in market sentiment.

The recent volatility in the Bitcoin market has also underscored the fragility of leveraged positions. A flash crash triggered by a whale selling 24,000 BTC—worth over $300 million—led to significant liquidations across the market. The selloff resulted in over $550 million in liquidations, with both Bitcoin and Ethereum positions experiencing heavy forced selling. Despite this, Ethereum has shown greater resilience, trading at $4,707 and rising 9% in the past week. Analysts attribute this to a combination of institutional buying, growing demand for Ethereum-based stablecoins, and expectations of a Fed rate cut, which could disproportionately benefit Ethereum due to its smaller market cap compared to Bitcoin.

Looking forward, the market is closely watching U.S. Federal Reserve statements and economic data, particularly the upcoming nonfarm payrolls report and the BLS preliminary payroll revision. These developments could influence the pace of monetary easing and, by extension, asset flows into crypto. For now, the shift in capital from Bitcoin to Ethereum appears to be a sustained trend, driven by structural changes in institutional demand and the growing utility of the Ethereum network. As the market digests recent volatility and prepares for key macroeconomic events, the focus remains on whether Ethereum can continue to outperform Bitcoin and whether altcoin season 2025 will gain further traction.

Source:

[1] Capital Rotation Into Ethereum Is Accelerating as ETH Recovers Faster (https://cryptopotato.com/capital-rotation-into-ethereum-is-accelerating-as-eth-recovers-faster/)

[2] Crypto Whales Buy $456M Ether in 'Natural Rotation' from Bitcoin (https://cointelegraph.com/news/ethereum-whales-buy-456m-eth-bitcoin-rotation-altcoin-season-2025)

[3] 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)

[4] Market Deep Dive: Stuck in the Hole (https://www.crypto-finance.com/market-deep-dive-stuck-in-the-hole/)