Ethereum's July Rally Fueled by Fresh Inflows, Not Bitcoin Rotation, Says 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, which reflects the total capital invested in Bitcoin based on the price of coins when they last moved, confirms that capital is continuing to flow into Bitcoin rather than exiting. These findings debunk the popular Bitcoin-to-Ethereum rotation narrative. Instead, both assets are experiencing parallel accumulation, with Ethereum's rally fueled by fresh inflows rather than Bitcoin sell-offs. This insight aligns with the Genesis Law of capital inflows during bull markets.

Institutional Interest and Market Developments

Further supporting this trend, the U.S. Securities and Exchange Commission (SEC) approved in-kind creations and redemptions for spot Bitcoin and Ethereum ETFs. This regulatory upgrade brings crypto exchange-traded products closer to traditional ETFs, enabling lower operational costs and greater efficiency. The SEC also approved new filings for mixed spot BTC-ETH exchange-traded products (ETPs) and options on spot Bitcoin ETFs, reflecting growing institutional demand. According to Crypto Rand, Ethereum's open interest is at its highest in over two years, comprising nearly 40% of the market, signaling rising attention from traders and investors. Notably, BlackRock added $1.2 billion in ETH last week compared to just $267 million in BTC, as pointed out by analyst Ted Pillows.

On-Chain Metrics and Market Sentiment

Data from IntoTheBlock shows Ethereum's daily active addresses jumped 12.7%, while 91% of ETH holders are currently in profit, indicating strong network activity and positive investor sentiment.

Why It Matters

The evidence suggests that Ethereum's recent price surge is driven by fresh capital inflows and growing institutional interest rather than a rotation of funds out of Bitcoin. Both cryptocurrencies are benefiting from increased demand, which could support further price appreciation.

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This article Ethereum's Rally Driven By Fresh Inflows, Not A Rotation Out Of Bitcoin: Report originally appeared on Benzinga.com. © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Frequently Asked Questions (FAQ)

Ethereum's Market Performance

Q: What caused Ethereum's rally in July? A: Reports suggest Ethereum's rally was primarily fueled by fresh capital inflows, rather than a rotation of funds from Bitcoin. Q: How did Ethereum perform against Bitcoin in July? A: Ethereum outperformed Bitcoin in July, with its price rallying over 53%, from $2,398 to $3,850.

Market Dynamics and Data

Q: What does Bitcoin's Realized Cap indicate? A: Bitcoin's Realized Cap reaching an all-time high indicates that capital continues to flow into Bitcoin, debunking the narrative of a Bitcoin-to-Ethereum rotation. Q: What is the significance of Ethereum's open interest reaching a two-year high? A: This signals increased attention and participation from traders and investors in the Ethereum market.

Institutional and Regulatory Developments

Q: What regulatory approvals have impacted crypto ETFs? A: The SEC approved in-kind creations and redemptions for spot Bitcoin and Ethereum ETFs, and also approved new filings for mixed spot BTC-ETH ETPs, indicating growing institutional interest. Q: Which major firm significantly increased its ETH holdings recently? A: BlackRock reportedly added $1.2 billion in ETH last week, significantly more than its $267 million investment in BTC during the same period.

On-Chain Metrics and Sentiment

Q: What do Ethereum's on-chain metrics indicate about market sentiment? A: Ethereum's daily active addresses increased by 12.7%, and 91% of ETH holders are currently in profit, suggesting strong network activity and positive investor sentiment. ##Crypto Market AI's Take This analysis highlights a crucial distinction in market dynamics: the influx of new capital into Ethereum, rather than a mere shift from Bitcoin. At AI Crypto Market, we leverage sophisticated AI agents for real-time market analysis and predictive modeling. Understanding these nuanced capital flows is vital for informed trading decisions. Our platform offers advanced tools for analyzing such trends, enabling users to identify promising investment opportunities and manage risk effectively. Explore our AI Agents for Trading to see how our technology can enhance your market strategy. ##More to Read: