Ethereum’s liquidity profile is showing promising signs of growth, yet it still lags behind its more established counterpart, Bitcoin. This is according to a recent analysis that applies a comprehensive framework previously used to evaluate Bitcoin’s liquidity. The results highlight Ethereum’s current market position and the potential for expansion, spurred by increasing institutional interest.
Realized Capital Growth: A Mixed Bag
Ethereum’s realized cap—a metric that tracks the net capital invested in the currency—has surged to a record $266 billion as of August 8, 2025. This figure represents a 43% increase since November 2022. While impressive, it’s worth noting that Bitcoin’s realized cap grew by a staggering 136% during the same period. “Ethereum is certainly attracting more investment,” says financial analyst Marcus Lee, “but there’s still a significant gap to close.” Interestingly, Ethereum Is Outperforming And Beating Bitcoin In This Key Metric provides further insights into areas where Ethereum is leading the charge.
Institutional Demand: The ETF Angle
Institutional interest in Ethereum is gaining momentum, particularly through spot ETH ETFs. A substantial 80-90% of inflows into these funds are genuine institutional allocations, as opposed to arbitrage-based trades. This is an encouraging sign, though the proportion of arbitrage-related flows remains higher for Ethereum than Bitcoin. Analyst Sarah Tran suggests that “this disparity indicates institutional adoption of Ethereum is still in its nascent stages compared to Bitcoin.” This trend aligns with the historic shift discussed in Ethereum in, Bitcoin out: Historic ‘Flippening’ Happens in ETFs.
Derivatives and Market Sentiment
The derivatives market provides another lens through which to view Ethereum’s progress. As of late July, open interest in ETH futures and options stood at $71 billion. However, options open interest remains less than half that of perpetual futures, a sign that institutional participation in Ethereum’s derivatives market could see substantial growth. Meanwhile, order book analysis shows a balanced supply-demand profile, indicating no extreme market positioning at present.
The Rise of Digital Asset Treasuries
A burgeoning driver of Ethereum’s liquidity is the emergence of digital asset treasuries (DATs). Corporations like Bitmine and Sharplink are diversifying into Ethereum, holding it on their balance sheets. Since April, DATs have accumulated approximately 4.1 million ETH, or $17.6 billion, representing about 3.4% of the circulating supply. “This kind of structural, long-duration demand is a game-changer,” notes crypto strategist Alex Chen, drawing parallels to Bitcoin’s rally fueled by corporate balance sheet strategies in late 2024.
Looking Ahead: Untapped Potential
Despite significant gains, Ethereum’s institutional participation remains in its infancy compared to Bitcoin. However, the groundwork is being laid for potentially substantial capital inflows in the coming months. Digital asset treasuries, along with growing institutional allocations via ETFs, could drive sustained demand for Ethereum. While uncertainties remain, the trajectory suggests room for outsized performance if Ethereum follows a path similar to Bitcoin’s.
In summary, while Ethereum’s liquidity metrics show promise, the road ahead is filled with challenges and opportunities. As the crypto landscape evolves, Ethereum’s ability to attract and sustain institutional interest will be pivotal in determining its future market standing.
Source
This article is based on: ETH Liquidity Check: Is it Catching Up with Bitcoin?
Further Reading
Deepen your understanding with these related articles:
- Fidelity Highlights Ethereum’s Unique Position Between Bitcoin and Solana
- Bitcoin ETFs Shed $1 Billion in Five Days Amid Ethereum Comeback
- Crypto whales buy $456M Ether in 'natural rotation' from Bitcoin
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
