Bitcoin (BTC) remains stable as investment flows shift toward Ethereum and other altcoins, according to Bitfinex Alpha’s report from Aug. 25.
This change indicates a strategic reallocation of institutional funds following Bitcoin’s peak value.
From the weekly open on Aug. 18 to Aug. 22, Bitcoin fell 4.5%, hitting local low ranges as investors reduced exposures ahead of the Federal Reserve’s Jackson Hole gathering.
During this period, the asset peaked at $111,990 amid ongoing weakness in US spot exchange-traded funds (ETFs), with Bitcoin ETFs seeing $1.18 billion in net outflows for the week. Currently, BTC has dropped below the $110,000 mark, trading at $109,795.71.
Jerome Powell, Chairman of the Federal Reserve, delivered dovish comments at Jackson Hole, which triggered a rapid increase in risk assets, leading to a widespread short squeeze in the crypto market.
Ethereum spearheaded the rebound, reaching a new all-time high of $4,958.70 on Aug. 24, highlighting its position as a liquidity catalyst for institutional investments.
On Aug. 18, spot ETH ETFs faced $197 million in outflows, marking the third-largest exit recorded. However, Ethereum treasury companies mitigated the intense selling pressure, with early estimates indicating substantial institutional backing.
Corporate treasuries, such as SharpLink Gaming, Bitmine Immersion Technologies, and BTCS, have accelerated their accumulation, pushing on-chain treasury balances above $10 billion. The report observed that this shift reflects reduced capital inflows into Bitcoin following its all-time high of $123,640 on Aug. 14.
Bitcoin’s realized market cap saw a monthly growth of 6% during the current phase, in contrast to a 13% monthly increase experienced during late-2024 surges above $100,000, suggesting a more cautious investor sentiment.
Macro trends remain favorable
Global liquidity conditions are advantageous, with the aggregate M2 money supply from major central banks nearing $100 trillion. This long-term upward trend in global liquidity supports the bullish narrative for digital assets, although capital deployments have become more discerning.
Solana rose above $200, reaching $212.60 as the overall digital asset market ascended alongside equities, indicating increasingly tight correlations between crypto and traditional risk assets. Additionally, network developments progress, exemplified by DBS Bank’s recent issuance of tokenized notes on Ethereum.
Against this backdrop, Bitfinex projects that Bitcoin will continue to trade within a tight range while Ethereum garners increased institutional interest, reminiscent of Bitcoin’s dynamics in early 2024.
The report forecasts a more significant capital shift toward riskier altcoins later in the cycle, with broader market realignment reliant on renewed Bitcoin ETF inflows and novel altcoin investment avenues.
