In our earlier research report titled Bitcoin’s Liquidity Trifecta: Unpacking Liquidity Across On-Chain Data, Market Microstructure and Macro Drivers, we examined how different liquidity indicators inform us about capital flows and liquidity conditions related to bitcoin. Applying this same analysis to ether (ETH) provides important insights into its current liquidity profile — both on-chain and in the wider market. In this update, we also emphasize the increasing influence of digital asset treasuries (DATs) which have surfaced as a pivotal factor in ETH’s recent surge.
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1. Realized cap: measuring new capital inflows
Realized cap tracks the net USD-denominated capital invested in a token, reflecting the cumulative cost basis of all holders. Since the cycle low in November 2022, ETH has absorbed over $81 billion in fresh capital inflows, pushing its realized cap to an all-time high of $266 billion as of August 8th, 2025.
For context, this represents a 43% increase for ETH over the period — substantial, yet still trailing bitcoin’s 136% increase in realized cap. The slower growth rate indicates that while ETH has been drawing in significant new investment, there is still considerable room for expansion as institutional interest picks up.
2. Unhedged spot ETH ETF demand: tracking institutional allocation
In our bitcoin study, we devised a method to assess genuine institutional demand by isolating ETF inflows not linked to hedged arbitrage trades. Using this approach for ETH indicates that 80–90% of spot ETH ETF inflows likely represent authentic institutional allocations, with the rest attributed to arbitrage strategies — long spot positions hedged via CME futures to exploit price differentials.
Interestingly, the percentage of arbitrage-related flows is significantly higher for ETH than bitcoin, where only around 3% of spot ether ETF inflows are estimated to be arbitrage-based. This reveals that institutional engagement with ETH still lags behind BTC, though we anticipate this gap will gradually close with the recent influx of institutional interest in the cryptocurrency.
Data source: Avenir, CFTC, Glassnode
3. Futures and options open interest: gauging derivatives growth
As of July 21st, the combined open interest (OI) in ETH futures and options reached $71 billion. However, in contrast to bitcoin — where OI in perpetual futures and options is almost balanced — ETH options OI remains less than half of perpetual futures OI.
Given that options are more frequently utilized by professional traders and institutions, this discrepancy signals substantial room for growth in institutional derivatives participation in ETH.
4. Limit order book imbalance: reading market sentiment
Analyzing the order book reveals significant shifts in sentiment. When ETH regained $3,800 in July after 7 months, a pronounced sell-side skew appeared on the limit order books (LOB), indicating strong, awaited profit-taking. However, as the price retracted toward $3,300, buy-side depth soared significantly, highlighting “buy-the-dip” behavior at that threshold. Since then, the order book has displayed a more balanced supply-demand profile, suggesting no extreme positioning in the market currently.
Data source: Avenir, Binance
5. Digital asset treasuries (DATs): growing structural buyers of ETH
A new and increasingly vital source of demand for ETH comes from DATs — companies diversifying into ETH by retaining it on their balance sheets. Noteworthy examples of this trend include Bitmine and Sharplink.
Since April, DATs have gathered approximately 4.1 million ETH ($17.6 billion), representing about 3.4% of the circulating supply; Bitmine alone accounts for 1.3%. For context, U.S. spot ETH ETFs currently hold 5.4% of ETH total supply. This underscores the magnitude of these structural allocations from DATs.
What differentiates DAT flows is their long-duration nature. Unlike futures traders or ETF arbitrage inflows, treasury allocations are less likely to shift capital frequently, providing a source of stable structural demand.
Conclusion
Evaluating on-chain and off-chain liquidity metrics reveals a consistent theme: ETH’s institutional participation is still in its early phases compared to bitcoin. Trends in realized cap growth, ETF inflow composition, and derivatives market structure all highlight significant untapped potential.
Moreover, DAT allocations are emerging as a powerful force behind sustained ETH flows, akin to how corporate balance sheet strategies created a new structural demand channel that facilitated bitcoin’s rally in late 2024.
If institutional uptake of ETH follows a similar trajectory to bitcoin’s, the forthcoming months may witness notable capital inflows, and with that, the potential for extraordinary performance.
