BTC Capital Rotation or Fresh Fund Inflows: What’s Really Fueling ETH’s Rally?
Main Idea
The ongoing ether (ETH) rally is driven by fresh capital inflows from investors rather than capital rotation from bitcoin (BTC), as evidenced by on-chain data and the Bitcoin Realized Capitalization.
Key Points
1. ETH has climbed over 60% this month, while BTC increased by 14% and reached a new all-time high in Realized Cap at $1.018 trillion.
2. On-chain data shows no significant capital rotation from BTC to ETH; investors are injecting new capital through ETFs and other investment products.
3. Institutional demand for ETH is strong, with the second-largest weekly inflow at $1.59 billion, exceeding 2023's total inflows.
4. The market dynamics resemble past bull cycles, with ETH rallying due to fresh investments rather than BTC sell-offs.
Description
The consensus in the crypto market is that the ongoing ether (ETH) rally, which has extended to other altcoins, is driven by capital rotation from bitcoin (BTC). However, on-chain data obtained by CryptoQuant has proven that the information is false. According to a report by CQ’s analyst Carmelo Aleman, fresh inflow from investors is driving the ETH rally, not capital rotation from bitcoin. Market participants are not selling BTC to buy ETH – the Bitcoin Realized Capitalization serves as evidenc...
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