While the crypto market is driven by a bullish cycle, a silent shift is taking place: Ethereum appears to be gaining ground against a weakening Bitcoin. Driven by clear institutional signals and more favorable performance mechanics, ETH's momentum is no longer a simple market rotation, but a structural repositioning. This potential reversal of the hierarchy, supported by concrete indicators, is redrawing the lines of force within the crypto ecosystem.
In short
The crypto market is entering a new phase, marked by a possible shift from Bitcoin to Ethereum.
Bitcoin is showing signs of running out of steam, linked to its high market capitalization and declining institutional returns.
Despite BTC's strength, capital is beginning to flow to other layer-one blockchains, notably Ethereum.
Ethereum appeals with its clear investment thesis, its staking yield and its central role in DeFi.
Bitcoin Tests Its Limits
As it continues to attract massive institutional inflows, bitcoin now appears to be reaching a plateau where its growth could automatically slow. This is what several analysts suggest.
Marcin Kazmierczak, co-founder and COO of Redstone, warns of the natural limitations associated with the growing size of the asset. He explains:
Bitcoin's dominance faces natural cap effects as market capitalization increases. A simple calculation suggests declining returns from institutional flows at current allocation levels.
Here are the main findings that reflect this change:
A performance ceiling: With a market capitalization approaching $2 trillion, BTC is entering a zone where each new billion invested weighs proportionally less on its price, thus reducing the marginal impact of inflows.
An institutional model already widely deployed: several companies, such as Trump Media and Strive, have adopted a treasury strategy modeled on Strategy's, focused exclusively on bitcoin. This leaves little room for short-term surprises on this front.
Dominance slows altseason: While some have anticipated a massive altcoin rally, BTC's continued strength continues to hamper this scenario, at least temporarily.
A new distribution of capital is in the making: according to Jag Kooner, head of derivatives at Bitfinex, "capital is not leaving Bitcoin, but is accumulating on Layer 1s." This capital, far from fleeing the market, is gradually diversifying within layer 1 blockchains, led by Ethereum.
An expected stabilization of BTC's strength: For Kooner, this phenomenon could mark the beginning of "phase 3 of the bull cycle", where bitcoin ceases to be the sole locomotive of the market to give way to other assets in the ecosystem.
These elements reflect an ambivalent situation for BTC. It remains the bedrock of crypto valuation, but its upward potential now faces arithmetic and structural constraints.
This context opens up space for other assets capable of capturing the attention, and capital, of investors seeking yield and growth, such as Ethereum.
Ethereum, a new magnet for institutional capital
While Bitcoin's progress appears to be slowing, Ethereum is capitalizing on its strong fundamentals to attract the attention of institutional investors. May was particularly revealing, with ETH/BTC up more than 30%, a performance that coincided with the technical success of the Pectra upgrade.
However, beyond the technical momentum, it's the growing interest from institutional players that is giving this dynamic added depth. The case of SharpLink Gaming is emblematic. The company has just announced a $425 million private placement to launch a treasury strategy focused exclusively on Ethereum.
This strategic rotation is based on clear arguments. For Kazmierczak, “Ethereum benefits from a clearer institutional investment thesis (programmable currency, DeFi infrastructure) compared to most altcoins.”
Unlike other, more speculative altcoins, ETH offers a rational and structured investment proposition, centered on the value of its ecosystem. Added to this are tangible economic incentives such as staking returns, which are now seen as a diversification lever by professional investors.
Some market participants anticipate that the price of ETH could reach $3,000 as early as June.
This strategic direction could fundamentally reshape capital flows in the coming months. If current momentum continues, 2026 could see the acceleration of what Kazmierczak describes as an “institutional rotation” toward Ethereum, driven by its technological advances, such as EIP-7928, and its financial maturity. Such a trend could strengthen Ethereum’s autonomy from Bitcoin and accelerate the redefinition of the balance of power between the two assets.