Why Ethereum Is Suddenly Beating Bitcoin
The world's most popular cryptocurrency, Bitcoin, has recently been outperformed by its closest competitor, Ethereum. Over the last month, Ethereum's price surged approximately 54%, significantly outpacing Bitcoin's 10% gain.
Zack Shapiro, an attorney at the Bitcoin Policy Institute, attributes this recent outperformance primarily to speculation, noting that the long-term outlook remains uncertain.
Bullish Sentiment for Stablecoins
Markets have shown strong enthusiasm for stablecoins following the passage of the GENIUS Act, a landmark Senate bill that establishes regulatory frameworks for stablecoins and encourages more issuers to mint fiat-backed tokens.
Top stablecoins such as Tether, USD Coin, and Binance USD are issued on the Ethereum network. This has led to speculation that stablecoins could proliferate further, potentially increasing demand for Ethereum.
Retail giants like Walmart and Amazon are reportedly considering issuing their own stablecoins. Apollo chief economist Torsten Sløk suggests that using stablecoins for retail payments would represent a "big breakthrough" for the market.
Institutional Support Through ETFs
Institutional interest in Ethereum has grown with the introduction of Ethereum ETFs, which have driven significant inflows into the token. Notable firms such as BlackRock, Fidelity, and Grayscale now offer spot Ethereum ETFs.
- BlackRock's iShares Ethereum Trust ETF has risen 48.9% in the last month.
- Fidelity's Ethereum Fund is up 33.1%.
- Grayscale's Ethereum Mini Trust ETF increased by 49.2%.
Cumulative spot Ethereum ETF volumes reached $123.5 billion as of late July, according to data from The Block.
Growing Corporate Treasury Holdings
Corporate crypto treasuries have expanded in 2025, with many companies increasing their Ethereum holdings. For example:
- Bitmine Immersion recently raised its Ethereum holdings to over $2 billion.
- The Ether Machine reported Ethereum holdings climbing to $56.9 million.
These corporate buyers add upward pressure on Ethereum's price, contributing to its recent rally.
Cautious Outlook
Despite the current enthusiasm, Shapiro cautions that much of Ethereum's rally is driven by excitement and speculation around potential catalysts. The momentum could slow once regulatory details become clearer, especially concerning the pending CLARITY Act, a crypto market structure bill awaiting Congressional approval.
Key questions remain:
- Will the market structure bill pass?
- Will crypto primitives find product-market fit?
- Will Ethereum emerge as the dominant blockchain system over competitors?
Shapiro suggests a cautious approach, noting, "I would personally probably sell the news."
Frequently Asked Questions (FAQ)
What is driving Ethereum's recent price surge?
Ethereum's recent outperformance against Bitcoin is largely attributed to speculation surrounding the GENIUS Act, which could boost stablecoin adoption on the Ethereum network. Additionally, the introduction of Ethereum ETFs and increased corporate treasury holdings in ETH are contributing factors.
What is the significance of the GENIUS Act for Ethereum?
The GENIUS Act aims to create regulatory frameworks for stablecoins. Since major stablecoins like Tether and USD Coin are issued on the Ethereum network, the Act's passage is expected to encourage further stablecoin issuance and adoption, potentially increasing demand for Ethereum.
How have Ethereum ETFs impacted its price?
The launch of spot Ethereum ETFs by major firms like BlackRock, Fidelity, and Grayscale has led to significant institutional investment and inflows into Ethereum, contributing to its recent price rally.
What are some of the risks or cautionary notes regarding Ethereum's current rally?
While enthusiasm is high, some experts caution that the rally is heavily driven by speculation. Regulatory clarity, particularly regarding pending bills like the CLARITY Act, could influence future momentum. There's also the question of whether Ethereum will maintain its dominance over competing blockchain systems.
What are corporate treasury holdings in the context of Ethereum's price?
Some companies are increasing their holdings of Ethereum as part of their corporate treasury. This increased demand from corporate buyers can put upward pressure on Ethereum's price, contributing to its recent rally.
##Crypto Market AI's Take
The recent outperformance of Ethereum over Bitcoin highlights a dynamic shift in the cryptocurrency market, driven by institutional adoption and regulatory developments. At AI Crypto Market, we leverage advanced AI and machine learning to navigate these evolving trends. Our platform offers sophisticated tools, including AI-powered trading bots and market analysis, to help investors capitalize on such market movements. Understanding the interplay between stablecoins, ETFs, and corporate treasury strategies is crucial for informed decision-making. Explore our comprehensive market intelligence and trading insights to stay ahead in this fast-paced environment.
##More to Read:
- How do cryptocurrencies gain value? A complete investor's guide
- AI Crypto Market Platform - LLM Training Data
- What is a blockchain? A comprehensive beginner-friendly guide
- Ethereum News: AI-Driven Crypto LYNO Surges on Fed Policy & Powell's Statements
Source: Business Insider
