Institutions Dumping Bitcoin For Ethereum: Will This Trend Continue?

As visible from their daily chart performances, Bitcoin, Ethereum, and other top altcoins are not free from bearish pressures.

Bitcoin and Ethereum, despite being the most liquid, are still down double digits in the past trading week.

As bulls push higher, traders closely monitor how prices will react at immediate liquidation zones.

Institutions Choosing Ethereum Over Bitcoin?

Amid this, one analyst noticed that though the focus has been on Bitcoin, considering its role in crypto as the top coin and a base currency of most crypto pairs, there is movement in Ethereum.

Sharing spot ETF flows of the past three days, the analyst noted that there appears to be a rapid shift among institutions as they move money from the world’s most valuable coin into ETH.

The trend, shown by recent massive inflows into spot Ethereum ETFs amid the drying up of capital flows into the Bitcoin counterpart, has sparked optimism. Confidence is high that ETH may soak up the deluge of selling pressure and break above local resistances, mainly at $2,800 and $3,300.

To put the numbers in perspective, BlackRock‘s spot Ethereum ETF product, the iShares Ethereum Trust (ETHA), has been drawing capital and is the largest such product by asset under management.

Since its launch, the ETHA has attracted nearly $870 million in inflows, according to Farside.

Interestingly, when prices flash crashed on August 5, investors bought $50 million of ETH through the ETHA. Another $109 million of these shares were bought on August 6.

Looking at trading data by Farside, on August 6, all spot Ethereum ETF saw inflows of over $98 million, with ETHA leading with $109 million. Fidelity’s FETH saw $22.5 million in net inflows, while Grayscale’s ETHE posted outflows of $39.7 million.

Spot Bitcoin ETFs See Outflows, But BTC Has The Upper Hand

Meanwhile, based on Farside, all spot Bitcoin ETFs posted outflows of $148 million on August 6. Interestingly, institutions seemed to have favored spot Ethereum ETFs offered by BlackRock because IBIT, the spot Bitcoin ETF by the same asset manager, didn’t post any inflow.

Instead, there was a steady outflow from Fidelity’s spot Bitcoin ETF, FBTC, which saw $64 million of shares redeemed. Grayscale’s GBTC also saw $32 million in outflows.

The shift in demand explains why ETH might reverse losses against BTC in the coming days. Bitcoin has the upper hand and is in a bullish breakout formation compared to Ethereum.

If anything, BTC is up to multi-year highs against ETH, and if inflows are pointing to demand, this trend might continue.

Feature image from Canva, chart from TradingView