Ethereum, a rising star in the digital currency world, is making waves. It’s now outperforming Bitcoin, its bigger sibling, catching the eye of major financial players. This shift signals a fresh chapter in the crypto market.
For much of this year, Ethereum (ETH) has surged, gaining roughly 30%. Bitcoin (BTC) saw a more modest 21% rise in the same period. This comes after both cryptocurrencies faced a tough start to 2025. Back then, fears over U.S. trade tariffs from Donald Trump and global tensions caused a market slump. Ethereum alone dropped over 55%.
But things picked up sharply for Ethereum in recent weeks. Since early July, its price has shot up by nearly 70%. It recently neared $4,800, a level not seen since 2021. Meanwhile, Bitcoin, despite hitting a new high of $124,000, only grew by 9% in the same timeframe. This stark difference in performance is turning heads.
Leading financial institutions like Citi and research firm K33 have noted this trend. Their reports highlight strong demand from Ethereum exchange-traded funds (ETFs) and a surge in on-chain activity. These factors are fueling Ethereum’s climb.
ETFs Spark Ethereum’s Price Jump
A recent report from Citi, penned by analysts Alex Saunders and Nathaniel Rupert, points to Ethereum’s strong rebound. This isn’t just about recovering lost ground. It shows Ethereum gaining market share, a pattern not observed since late last year. Unlike past cycles where Ethereum typically lagged, it’s now attracting capital. This suggests investors are looking beyond Bitcoin to other digital assets.
A major force behind this rally is the growing appetite for spot Ethereum ETFs. Data from Citi reveals these products have pulled in over $13 billion in net flows since their launch in July 2024. This is a big jump from $2.6 billion collected by April. Analysts at Citi note that as ETF balances swell, these flows directly impact price action. This flood of institutional cash acts as a clear boost for Ethereum’s value.
Big Players Are Stockpiling, Squeezing Supply
Beyond ETFs, companies holding crypto in their treasuries have ramped up Ethereum purchases. Since May, their combined holdings have swelled to more than $10 billion. This corporate interest doesn’t just push up the price. It also enhances the value of these companies’ stock, creating a positive cycle.
Blockchain data confirms that large wallets are accumulating Ethereum. At the same time, smaller, individual investors are reducing their holdings. Ethereum reserves on centralized exchanges keep falling. This means more supply is moving off exchanges and back onto the blockchain. This shift could “squeeze” the available supply, further boosting the price.
Citi’s report emphasizes that Ethereum’s rise isn’t merely a technical chart play. It’s built on strong fundamentals. Network activity has bounced back, with key metrics improving. In today’s market, with favorable regulations taking shape and positive stories circulating, Citi believes Ethereum’s comeback could continue. The combination of institutional demand, on-chain accumulation, and a good overall market view positions Ethereum for more growth, Citi analysts conclude.
ETH/BTC Correlation Reaches 2025 High
Citi’s findings align with a report from K33 Research. This report points out that the correlation between Ethereum and Bitcoin has reached a 2025 high, topping 0.037. This happened as Ether’s price surged.
The K33 team also highlighted the record $9.4 billion inflows into Ethereum ETFs since June 2. They also noted the rise in corporate treasuries that now control over 5% of Ethereum’s circulating supply. Together, ETFs and corporate treasuries now hold more than 7% of Ethereum’s total supply, according to recent data.
While Ethereum’s momentum has been swift, Citi cautions that risks remain. The crypto market is still sensitive to big economic news. For example, a recent unexpected jump in U.S. inflation cooled Bitcoin’s derivatives market. Despite this, the ETH/BTC correlation remains strong, allowing for price swings in either direction.
Anticipation of Federal Reserve Chair Jerome Powell’s speech in Jackson Hole on Friday temporarily slowed the crypto market’s rally. Investors are now watching closely for clues about any shifts in monetary policy. Currently, Ethereum is trading with some volatility, hovering around $4,300, according to CoinGecko.
Broadly speaking, Ethereum’s resurgence could signal a bigger shift in the crypto market. It suggests Ethereum is not just catching up but challenging Bitcoin’s long-held dominance. With record institutional flows and robust on-chain activity, investors are keen to see if this trend will solidify in the months ahead.