Ethereum News Today: Ethereum Drives Altcoin Momentum as Bitcoin Dominance Falls to 59%

Coinbase has highlighted emerging signs of a potential altcoin season, with Ethereum positioned as a key driver of the momentum. The exchange noted that Ethereum’s market capitalization has surged by 50% since early July, fueled by strong institutional demand and a growing narrative around real-world asset integration [1]. This shift is also reflected in the declining dominance of Bitcoin, which has dropped from 65% in May to approximately 59% in August, suggesting capital is rotating into altcoins [1].

Coinbase’s August research report underscores that the market is largely on track with its earlier projections for new highs in the second half of 2025. Factors such as stronger-than-expected macroeconomic conditions and clearer regulatory developments have supported this trajectory [1]. The firm emphasized that Ethereum has become the central beneficiary of this trend, with digital asset treasuries and stablecoin narratives playing a pivotal role [1].

Institutional activity has further amplified Ethereum’s gains. Bitmine Immersion Technologies, for example, has acquired 1.2 million ETH following a $20 billion capital raise, and the company has the capacity to purchase up to $24.5 billion worth of the asset. This acquisition has positioned Bitmine as the leading Ethereum-focused treasury, surpassing Sharplink Gaming, the previous leader [1]. Top institutional holders now collectively control nearly 3 million ETH, or about 2% of the total supply [1].

Tokens closely tied to Ethereum—including Arbitrum, Ethena, Lido DAO, and Optimism—have mirrored ETH’s performance, with Lido DAO standing out as the most significant gainer. Lido’s 58% rise in August is attributed to both its ETH exposure and a U.S. Securities and Exchange Commission (SEC) staff statement that certain liquid staking tokens are not considered securities [1].

While the Altcoin Season Index remains below the 75 threshold that historically signals a full altcoin rotation, Coinbase noted that the conditions are increasingly favorable for a broader rally. Institutional flows have been the primary force behind Ethereum’s performance, but the firm also highlighted that over $7.2 trillion remains in U.S. money market funds—the largest on record. These funds represent “missed opportunity costs,” according to Coinbase, driven by high traditional valuations and trade uncertainties [1].

The firm anticipates that an expected Federal Reserve rate cut in September could reduce the appeal of money market funds and redirect capital into risk assets, including crypto. Additionally, Coinbase’s liquidity index—which measures stablecoin issuance, trading volumes, order book depth, and free float—has begun to recover after months of decline. This suggests that liquidity is returning to the crypto market [1].

“While our 3Q25 outlook remains constructive, our view on an altcoin season has evolved,” the report stated. “The recent decrease in Bitcoin dominance suggests an early rotation of capital into altcoins rather than a full-scale altcoin season at this stage [1].” Coinbase concluded that, with the Fed poised to ease in September and the SEC signaling flexibility around certain token models, the conditions for a deeper altcoin season are beginning to materialize [1].

Source:

[1] Cryptonews - [https://cryptonews.com/news/coinbase-flags-early-signs-altcoin-season-ethereum-at-core-momentum/](https://cryptonews.com/news/coinbase-flags-early-signs-altcoin-season-ethereum-at-core-momentum/)