Last week’s sell off in Bitcoin and Ethereum will not change the basic narrative out there for cryptocurrency investors – Ethereum (ETH) is the No. 2 buy and hold after Bitcoin. Nothing comes close. It is surely Wall Street’s favorite blockchain. Its near-record highs in August were propelled thanks to Bitcoin’s all-time highs in early August.
“Nothing marks a Bitcoin dominance top like a whale rotating into Ethereum,” said Joel Valenzuela, core founder of Dash DAO (DASH).
A Bitcoin whale, holding around $11 billion in BTC reportedly shifted $2.59 billion into Ethereum—allocating $2.2 billion for spot ETH and $577 million into perpetual long positions, realizing about $33 million in profits. Additionally, Arkham data revealed on August 29 that nine massive whale addresses acquired a combined $456 million in ETH, signaling a “natural rotation” of capital from Bitcoin to Ethereum.
(Sadly, one of them was hacked and seems to have lost everything, according to the @ZachXBT account on on X, an advisor for Paradigm, a cryptocurrencies investment firm in San Francisco.)
It’s not just old Bitcoin holders pumping Ethereum’s value. It’s Wall Street that’s driving a lot of the investment thesis behind the world’s leading blockchain.
“The rotation into Ethereum tells us something important: institutions are no longer just buying crypto, but they are also allocating to infrastructure, as in blockchains,” said Andrei Grachev, Managing Partner of DWF Labs, a Web3 investment firm and market maker based in Singapore.
“Ethereum is not just another asset on the screen. It is where staking generates returns, stablecoins get issued, and entire financial applications are settled,” Grachev said. “This is about more than price momentum. It is about cash flows, validator economics, and a growing appetite for on-chain income. Bitcoin gave institutions a simple entry point, but Ethereum is giving them a strategy. As regulatory clarity improves, especially in Europe, allocators are starting to treat the Ethereum ecosystem as investable.”
Will The Ethereum Rotation Continue In September?
Will the rotation out of BTC and into ETH continue into September? Nobody knows, obviously. For now, Bitcoin flow is staging a comeback and is back to being No. 1 in crypto.
Looking into the recent past, spot‑Ethereum ETFs pulled in $2.03 billion on one day alone – Friday, August 29, based on SoSoValue trading data for aggregate value of all Ethereum ETF transactions. That number was a little less than Bitcoin, which had an aggregate traded value of $2.5 billion.
Ethereum still has a long way to go to catch up to the assets under management in similar BTC funds. ETFs hold about $29.5 billion in Ethereum tokens while holding $144.9 billion in Bitcoin ETFs here in the U.S., according to SoSoValue.
Top Five Ethereum ETFs.
These are the largest Ethereum funds by market capitalization, along with a look at their gains versus Nasdaq and the Grayscale Bitcoin Trust (GBTC) year-to-date ending August 29.
iShares Ethereum Trust (ETHA): AUM: approximately $17.2 billion—the largest of its kind.
Grayscale Ethereum Trust ETF (ETHE): AUM: roughly $4.93–$4.96 billion.
Fidelity Ethereum Fund ETF (FETH): AUM: about $3.68 billion.
Grayscale Ethereum Mini Trust ETF (ETH): AUM: approximately $3.28 billion.
Bitwise Ethereum ETF (ETHW): AUM: about $623 million.
Are Ethereum ETFs Overbought?
Current relative strength index readings on the iShares Ethereum Trust have it at around 60.4. Anything over 70 is considered overbought.
Long-term Ethereum holders are unlikely dwelling too much on recent market highs, but new retail investors may want to hold their powder for a bit. A sell-off will give investors a discount to hold the world’s No. 2 most traded cryptocurrency after Bitcoin. As a rule, investors tend to warn against buying into market highs.
“Ethereum’s stealing the show right now, and it’s kind of a big deal,” said Mete Al, CEO and Co-Founder of ICB Labs. ICB Labs operates the proprietary ICB Network, a Layer-1 proof-of-stake blockchain. They have offices in Dubai and in the “Crypto Valley” of Zug, Switzerland.
For years, Bitcoin ETFs were the ones grabbing all the headlines and the inflow from Wall Street. Ethereum’s getting some “serious love” with billions pouring in, said Al.
“Investors aren’t just chasing Bitcoin’s ‘digital gold’ vibe anymore, but rather they’re betting on Ethereum’s real world uses and the ability to reap additional returns through staking,” he said. Staking is when investors lock in their tokens in order to gain yield.
Moreover, Ethereum’s Layer-2 blockchain solutions like Optimism (OP), Arbitrum (ARB), and Polygon (MATIC) are blowing up, Al said.
“This isn’t just a one-off for Ethereum,” Al said. “It feels like a shift where big players are spreading their bets beyond Bitcoin. If this keeps up, it won’t just be Ethereum in the spotlight; the whole ecosystem tied to it could get a massive boost as money chases the next big thing.”
The writer is an investor in the Grayscale Bitcoin Trust ETF.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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