Ethereum (ETH) Capital Inflows Pales in Comparison to Bitcoin (BTC)

During the ongoing cycle, BTC and ETH have seen increasing divergence in their respective performances.

According to Glassnode results, this can be attributed to the overall trend of weaker capital turnover, especially compared to previous cycles and all-time high breakouts.

Ethereum is receiving weak capital inflows

In the run-up to Bitcoin's peak set for March 14, Glassnode was created Notice Increase in speculative activity. According to the latest on-chain weekly report, capital accumulation among BTC holders has been seen in the short term, with nearly $240 billion of wealth held in coins transferred over the past six months, near peak levels.

The same cannot be said for Ethereum, which has failed to replicate this trend so far. The leading altcoin has yet to surpass its all-time high in 2021. As such, the maximum realized cap for a short-term holder of Bitcoin (STH) is roughly at the same level as the peak of the recent uptrend, while the maximum realized cap for STH Ethereum has barely risen from its lows, indicating a noticeably lackluster inflow of new capital.

This lack of new capital inflows reflects ETH's poor performance compared to BTC. This may be due in part to the interest and accessibility offered by spot Bitcoin ETFs.

The market is still anticipating the SEC's decision on approving a group of Ethereum ETFs, which is expected by the end of May.

As a result, “sophisticated” investors in Ethereum “sit back and wait patiently for the price to rise.”

“When we break down the capital flows and rotation between BTC and ETH, we can see that Bitcoin has had the lion's share of inflows, which are likely driven in part by US spot ETFs. Speculative activity and short-term investors appear to be concentrated Within Bitcoin, with noticeably weak spillover into Ethereum so far.”

Ethereum price performance so far

While ETH may underperform compared to BTC due to the lack of a catalyst, Glassnode analysis indicates that the overall uptrend appears to be one of the most resilient in history, with relatively shallow corrections so far.

The altcoin is struggling to cross $3,000. It reached a multi-year peak of nearly $4,000 earlier this year but has failed to sustain its rally and is now on the verge of a major decline.