What to know:
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In our previous tome, Bitcoin’s Liquidity Trifecta: Unpacking Liquidity Across On-Chain Data, Market Microstructure and Macro Drivers, we delved into the labyrinth of liquidity, a concept as elusive as a honest politician. Now, we turn our gaze to ether (ETH), the younger sibling in this digital dynasty, and ask: can it ever escape the shadow of its elder brother, Bitcoin? Applying the same framework, we uncover a tale of ambition, laggards, and the occasional glimmer of hope.
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1. Realized cap: measuring new capital inflows
Ah, the realized cap-a metric as sobering as a Russian winter. Since its cycle low in November 2022, ETH has absorbed over $81 billion in fresh capital, pushing its realized cap to a new all-time high of $266 billion as of August 8th, 2025. A 43% increase, you say? Impressive, but let us not forget Bitcoin’s 136% rise. ETH, my dear, you are the tortoise in this race, and the hare is already at the finish line, sipping champagne. 🥂
2. Unhedged spot ETH ETF demand: tracking institutional allocation
In our Bitcoin study, we devised a method to separate the wheat from the chaff-genuine institutional demand from arbitrage shenanigans. Applying this to ETH reveals that 80-90% of spot ETH ETF inflows are likely genuine, with the remainder driven by arbitrage strategies. Bitcoin, in contrast, boasts a mere 3% arbitrage-based inflows. ETH, you are still the awkward teenager at the institutional party, while Bitcoin is the suave host. 🕺
Data source: Avenir, CFTC, Glassnode
3. Futures and options open interest: gauging derivatives growth
As of July 21st, ETH’s combined open interest in futures and options stood at $71 billion. But here’s the rub: ETH options OI is less than half of perpetual futures OI, unlike Bitcoin’s balanced act. Institutions, it seems, are still tiptoeing into ETH derivatives. The stage is set, but the actors are yet to arrive. 🎭
4. Limit order book imbalance: reading market sentiment
The order book, that fickle beast, reveals much. When ETH reclaimed $3,800 in July after 7 months, a sell-side skew emerged-profit-taking, as predictable as a Soviet five-year plan. But as the price retraced to $3,300, buy-side depth surged, a testament to the “buy-the-dip” mantra. The order book now stands balanced, a rare moment of equilibrium in this chaotic dance. ⚖️
Data source: Avenir, Binance
5. Digital asset treasuries (DATs): growing structural buyers of ETH
Enter the DATs, the new kids on the block, corporations diversifying into ETH like it’s the latest fad diet. Since April, DATs have accumulated roughly 4.1 million ETH ($17.6 billion), or 3.4% of the circulating supply. Bitmine alone accounts for 1.3%. Compare this to U.S. spot ETH ETFs holding 5.4% of the total supply. These allocations are sticky, like a Soviet-era bureaucracy, providing a structural demand that ETH sorely needs. 🏗️
Conclusion
Across on-chain and off-chain metrics, the verdict is clear: ETH’s institutional participation is still in its infancy compared to Bitcoin. Yet, the DATs offer a glimmer of hope, a structural demand channel that could fuel ETH’s ascent. If history is any guide, and it often is, ETH’s trajectory may mirror Bitcoin’s, with outsized performance on the horizon. But for now, ETH remains the tortoise, plodding along, while Bitcoin soars. 🐢🚀
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates. After all, in the land of crypto, opinions are as plentiful as volatility. 📉📈
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2025-08-27 20:05