The logic behind why ETH has outperformed Bitcoin recently

Ethereum has recently outperformed Bitcoin.

Over the past week, Ethereum has risen cumulatively by about 11%, while Bitcoin has risen only about 4.2% over the same period.

From the June 6 low point of $1,505, it has rebounded by about 30%. Among the top ten mainstream coins by market capitalization, it has been the best performer. Over the same period, BTC’s increase was 11.7%.

Ethereum ETF capital inflows

This is the most direct reason behind Ethereum’s strong performance this round. Unlike the volatility and inconsistency seen with Bitcoin ETF fund flows, Ethereum ETFs have seen sustained, large-scale net inflows.

On July 20, Eastern Time, Ethereum spot ETFs recorded total net inflows of $38.0886 million. The Ethereum spot ETF with the largest single-day net inflow yesterday was BlackRock’s ETF ETHA, with a net inflow of $34.311 million. ETHA’s cumulative historical total net inflow has now reached $11.348 billion. Next was Fidelity’s ETF FETH, with a single-day net inflow of $2.8315 million, and FETH’s cumulative historical total net inflow has now reached $2.131 billion.

From July 6 to July 11, U.S. spot Ethereum ETF net inflows totaled as much as $1.82 billion, setting the strongest weekly performance since January. This momentum continued into the following week, with another net inflow of $105 million.

Highly concentrated capital: Most of the funds flowed into BlackRock’s low-fee products (such as ETHA). Just on July 9 alone, ETHA attracted $742 million in capital.

As of the time of publication, Ethereum spot ETFs’ total net asset value is $10.295 billion. The ETF net asset ratio (the share of market cap relative to Ethereum’s total market cap) is 4.48%. Historical cumulative net inflows have already reached $11.117 billion.

A contrast with Bitcoin: In the same period, Bitcoin ETF fund flows were highly volatile. For example, on July 13 there were net outflows of $424 million, and the next day there were net inflows of $181 million again, indicating that investors’ confidence is unstable.

On the other hand, the split in the capital flows is directly reflected in the price ratio. The ETH/BTC ratio has recently achieved a key breakthrough.

• Breaking a 301-day downward trend: The ratio successfully broke through the downward resistance line that had capped its upside for 301 days.

• Rising to a multi-month high: Driven by this, the ETH/BTC ratio rose to 0.0297, the highest level in three months.

• Significant for the market: A sustained rise in this ratio is often interpreted by the market as a signal that capital is rotating from Bitcoin to Ethereum and other competing altcoins.

From upgrading to a new ecosystem

In addition to the momentum from capital flows, Ethereum’s own fundamentals have also seen multiple positive catalysts.

• Major upgrade expectations: The market is eagerly looking forward to the upcoming “Glamsterdam” upgrade. The upgrade is expected to triple the Gas limit, reduce transaction fees by about 78%, and increase throughput to about 10,000 transactions per second, and is viewed as a key step in strengthening Ethereum as crucial infrastructure for institutional finance.

• A new source of demand: “Robinhood Chain,” a Layer 2 network launched by U.S. brokerage Robinhood on July 1, pays Gas fees in ETH and settles them on the Ethereum mainnet. The network’s daily transaction volume has already exceeded $800 million, creating new on-chain demand for ETH.

• Founder endorsement: Ethereum founder Vitalik Buterin released a long-term roadmap titled “Lean Ethereum” in early July, outlining the direction of protocol evolution through 2030, boosting market confidence.

• Whale accumulation: The institutional entity BitMine increased its holdings by 325,000 ETH over the past month, bringing its total holdings to 5.74 million ETH, indicating that large investors are actively positioning themselves.

Market analysts point out that when risk appetite rises and capital seeks assets with higher growth, Ethereum—viewed as a “high beta” asset—often outperforms Bitcoin, which is regarded as a “crypto safe-haven asset.”