Ethereum News Today: Institutional Capital Shifts, Ethereum Overtakes Bitcoin in Investor Favor

Ethereum (ETH) has continued to gain momentum amid broader crypto market shifts, with recent price action and on-chain data highlighting the growing appeal of the second-largest cryptocurrency. Ether's price surged above $4,867 on Aug. 23, surpassing its previous record high from November 2021. The rally has been driven in part by a dovish turn from the U.S. Federal Reserve and robust institutional adoption, with the token now up over 250% from its April lows. Meanwhile, Ethereum’s network appears to be attracting capital away from Bitcoin, despite relatively low gas fees and high throughput, suggesting a structural shift in investor behavior [1].

Gas usage on the Ethereum network remains high, despite relatively low average transaction fees, a dynamic that analysts attribute to growing demand for decentralized applications, smart contracts, and DeFi protocols. This pattern has been reinforced by increased Ethereum adoption among corporate treasuries, which have added approximately $1.6 billion in ETH holdings over the past month. As of Aug. 23, these holdings had reached over $29.75 billion, according to data from StrategicETHReserve.xyz. Such demand, coupled with a tightening supply dynamic and growing institutional interest, has helped Ethereum maintain upward momentum even as Bitcoin’s market dominance has dipped [1].

The decline in Bitcoin’s dominance of the cryptocurrency market has been particularly notable, with its market share dropping below 60% for the first time since March. This shift has been accompanied by a broader capital rotation into large-cap altcoins, with Ethereum leading the charge. Ethereum-focused investment products have attracted $2.86 billion in inflows during the week ending Aug. 15, significantly outperforming Bitcoin’s $552 million in inflows during the same period. Month-to-date, Ethereum fund holdings have grown by more than $2.96 billion, while Bitcoin has experienced a net outflow of $21 million. These figures indicate a clear preference for Ethereum among institutional and retail investors seeking higher returns [1].

On-chain metrics also reflect a strong balance between supply and demand. According to Hyblock analysts, Ethereum’s market demand continues to outpace its available supply, with real demand absorbing potential selling pressure typically seen at all-time highs. This has been supported by ongoing inflows into U.S.-based Ethereum ETFs, which saw $287.60 million in net inflows on Aug. 21 after four consecutive days of outflows. As of Aug. 23, Ethereum ETFs were managing over $12.12 billion in assets, a sign of continued institutional confidence in the token [1].

Looking ahead, several major Ethereum Improvement Proposals (EIPs) have laid the groundwork for future upgrades that could enhance scalability and usability. EIP-4844, for instance, is set to improve throughput and reduce fees by enabling more efficient data storage through “blobs.” These protocol-level changes are expected to further differentiate Ethereum from Bitcoin and other blockchains by offering a more flexible and scalable infrastructure for developers and enterprises [2]. Analysts at Standard Chartered have raised their year-end ETH price target to $7,500 from $4,000 and project $25,000 by 2028, while some market participants suggest the token could reach $13,000 in the coming months [1].

Source:

[1] ETH HIts New Highs As Fed Turns Dovish, Ether ETF Inflows Resume (https://cointelegraph.com/news/eth-hits-new-highs-as-fed-turns-dovish-ether-etf-inflows-resume)

[2] What Are Ethereum Improvement Proposals (EIPs)? (https://onekey.so/blog/ecosystem/what-are-ethereum-improvement-proposals-eips/)