Why Ethereum Has Become the “Leader” in the Crypto Bull Run While Bitcoin Hits New Highs?

TradingKey - On Thursday, August 14, both Bitcoin and Ethereum rose over 3%, driven by expectations of a significant rate cut from the Federal Reserve and continued growth in cryptocurrency ETF demand. Bitcoin surged past $124,000 to reach a new all-time high, while Ethereum climbed to within 3% of its all-time peak.

Real-time price data shows that Bitcoin reached a high of $124,457.12 on Thursday, currently trading at $123,349.97, up 3.64% over the past month. Ethereum rose to $4,717.51, up 58.91% over the past month.

Ethereum Price Chart, Source: TradingKey

After the July nonfarm payroll report, traders significantly increased their expectations for a Fed rate cut in September. Following the release of the July CPI report, the possibility of a larger rate cut has emerged. U.S. Treasury Secretary Scott Bessent said on Wednesday that a 50-basis-point rate cut in September is highly likely.

A more accommodative monetary policy environment is clearly favorable for risk assets like cryptocurrencies, and the Trump administration’s crypto-friendly policies are accelerating institutional investors’ interest in allocating to digital assets. This is reflected in the growing assets under management of crypto ETFs and the increasing number of companies adopting a “coin-treasury” strategy similar to Strategy(MSTR).

In this crypto bull market, Ethereum, the second-largest cryptocurrency, is no longer just following Bitcoin. After net inflows hit a record high of $1.02 billion on Monday, nine spot Ethereum ETFs saw another $523.9 million in net inflows on Tuesday, while 12 spot Bitcoin ETFs recorded only $65.9 million in net inflows.

In addition, spot Ethereum ETF trading volume surpassed that of 12 spot Bitcoin ETFs for the first time in history on Tuesday. Bloomberg data shows that spot ETH ETFs have recorded $1.7 billion in net inflows in August so far, while BTC ETFs have seen $436 million in net outflows.

An investment firm said the recent strong inflows into Ethereum ETFs mark a significant shift from the dominance of Bitcoin ETF inflows seen in the previous year and earlier this year.

Standard Chartered noted that the U.S. passage of the GENIUS Act in July has paved the way for mainstream adoption of stablecoins. Stablecoins currently account for 40% of all blockchain fees, and over 50% of stablecoins are issued on the Ethereum blockchain. The Act will indirectly boost Layer 1 activity on Ethereum, as increased stablecoin liquidity will drive more decentralized finance (DeFi) activity.

To date, Ethereum has maintained an absolute advantage in DeFi, with approximately 65% of total value locked (TVL) in DeFi located on the Ethereum network. Standard Chartered expects Ethereum’s price to reach $7,500 by the end of this year, $12,000 by the end of 2026, and $25,000 by the end of 2028.

Source: TradingKey

Ethereum treasury companies such as Bitmine and SharpLink continue to aggressively pursue strategies of buying Ethereum as an asset allocation. On Tuesday, Bitmine sought to raise $2.45 billion through a new stock offering to purchase Ethereum, while SharpLink completed a $389 million capital raise to acquire ETH.

As of August 13, Ethereum treasury companies collectively held $9.76 billion worth of Ethereum, and the amount continues to rise.

Value of Ethereum Held by Ethereum Treasury Companies, Source: The Block