Ethereum's Rally Driven By Fresh Inflows, Not A Rotation Out Of Bitcoin: Report

Ethereum (CRYPTO: ETH) has outperformed Bitcoin (CRYPTO: BTC) in July, rallying over 53% from $2,398 to $3,850. While some attributed this surge to capital rotating out of Bitcoin, on-chain data tells a different story.

What Happened: CryptoQuant data shows that Bitcoin's Realized Cap reached an all-time high of $1.018 trillion on July 25.

This key metric, reflecting the total capital invested in Bitcoin based on the price of coins when they last moved, confirms that capital is continuing to flow into BTC, not exiting.

The findings debunk the Bitcoin-to-Ethereum rotation narrative.

Instead, it suggests both assets are seeing parallel accumulation, with Ethereum's rally fueled by new inflows rather than Bitcoin sell-offs, an insight aligned with the Genesis Law of capital inflows during bull markets.

Also Read: Ethereum Sees Surging Institutional Flows: Is ETH Going To $4,000?

Why It Matters: Furthermore, the U.S. SEC approved in-kind creations and redemptions for spot Bitcoin and Ethereum ETFs. This upgrade brings crypto exchange-traded products closer to traditional ETFs, enabling lower operational costs and greater efficiency. The agency also approved new filings for mixed spot BTC-ETH ETPs and options on spot Bitcoin ETFs, reflecting growing institutional demand.

According to Crypto Rand, Ethereum open interest is at its highest in over two years, comprising nearly 40% of the market, another sign of rising attention.

Ted Pillows pointed out that BlackRock added $1.2 billion in ETH last week, compared to just $267 million in BTC.

IntoTheBlock data shows Ethereum's daily active addresses jumped 12.7%, while 91% of ETH holders are now in profit.

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