The crypto market is witnessing a notable transformation: Ethereum has officially surpassed Bitcoin in trading volume for perpetual futures contracts, achieving a dominance of 67% – the highest ever. This is not just a technical sign but also reflects the shift of capital flows, risk appetite, and confidence from both speculators and institutional investors toward the altcoin ecosystem, with ETH emerging as a new center.
The shift from Bitcoin to Ethereum
For many years, Bitcoin has been regarded as the center of the derivatives market, where most liquidity and speculative activity revolves around 'digital gold'. The trading volume of perpetual futures contracts for BTC often overwhelmingly dominates, reflecting its dominant role not only in the spot market but also in the derivatives sector. However, the latest data from Glassnode indicates a pivotal change: Ethereum has surpassed Bitcoin and rapidly widened the gap, a rare phenomenon in market history.
This cannot be seen as a mere coincidence. Ethereum has long been regarded by the community as a 'barometer' for altcoin cycles. Whenever ETH shows superiority over BTC, the market typically enters a phase of broad growth, where capital moves away from Bitcoin in search of opportunities in higher-risk assets with greater profit potential. The trading volume of ETH futures accounting for 67% of the total market – a historical record – accurately reflects this shift.
In other words, Ethereum is not only regaining its position from Bitcoin in the derivatives market but is also becoming representative of the new risk appetite of investors. This rise opens up an important possibility: altcoins may have entered the launch phase for a new growth cycle, with ETH playing the role of the 'locomotive' leading the flow of capital and market sentiment.
OI: A signal affirming the trend
If the trading volume of perpetual futures reflects the intensity of immediate speculation, then open interest (OI) provides a more sustainable perspective, as it represents the total number of contracts currently existing in the market. Recent data shows that Ethereum's OI has risen to 43.3%, significantly narrowing the gap with Bitcoin – which currently holds 56.7%. This is a major advancement compared to the beginning of the year when ETH was still seen as a 'supplementary' asset rather than an investment option in parallel with BTC.
What is even more noteworthy is that the trend does not stop solely at Ethereum. The total OI of leading altcoins such as ETH, Solana, XRP, and Dogecoin had previously reached $60.2 billion, a new record, before adjusting down by $2.6 billion – among the ten largest drops in history. This volatility reflects two aspects: on one hand, the altcoin market is in a sensitive state, easily reacting strongly to large capital flows; on the other hand, it also proves that altcoins are no longer sidelined but have become an important pillar in the structure of the derivatives market.
From a strategic perspective, the continued growth of ETH's OI alongside trading volume indicates that investors are not only seeking short-term profits but are also willing to maintain longer-term positions. This further reinforces the argument that Ethereum is emerging as a true counterweight to Bitcoin, while paving the way for the scenario where altcoins become the main driving force in the next phase of the market cycle.
Institutional capital: The driving force behind ETH's rise
The recent explosion of Ethereum is not only driven by speculation in the derivatives market but is also strongly supported by institutional capital – a factor considered a 'sustainable catalyst' for major trends. According to the latest report from JPMorgan, in July alone, Ethereum ETFs attracted up to $5.4 billion in net capital, matching Bitcoin ETFs in size for the first time. This is a symbolic milestone, indicating that Ethereum is entering a phase where interest from financial institutions is no longer inferior to that of BTC.
Notably, developments in August further highlight the differences: while Bitcoin ETFs have started to see slight withdrawals, Ethereum ETFs have maintained a steady inflow. This divergence reflects a reality that institutional confidence in ETH is now more sustainable, and investment funds no longer view ETH merely as an additional asset alongside BTC but as a strategic channel that requires long-term allocation.
Alongside capital flows, the legal factor is providing significant additional momentum. The passage of the GENIUS Act in the United States – a new legal framework for stablecoins – has marked an important turning point, as it directly reinforces confidence in Ethereum as a core infrastructure platform for DeFi and decentralized financial applications. This is a key differentiator compared to Bitcoin: while BTC is primarily viewed as a store of value asset, ETH is placed at the center of a practical application ecosystem.
Not stopping there, the market is focusing attention on a comprehensive crypto regulation bill expected to be announced in September. If implemented as anticipated, this legal framework will not only reinforce transparency and safety for institutional investors but could also make Ethereum the most beneficial asset, thanks to its role as the technological infrastructure for decentralized financial products and the tokenization of traditional assets.
Why does Ethereum have an advantage over Bitcoin?
Ethereum's superiority in the current phase is not a temporary result but is reinforced by many fundamental factors. JPMorgan has identified four key drivers helping ETH create a distinct advantage over Bitcoin.
First, the ability to stake within ETFs is seen as a potential turning point. If the U.S. Securities and Exchange Commission (SEC) approves, Ethereum spot ETFs may integrate staking features, allowing investors to earn passive rewards without needing to directly hold 32 ETH to operate a validator. This would make ETH ETFs products that not only serve as asset storage but also generate yields – an advantage that Bitcoin cannot have.
Second, the presence of ETH on corporate balance sheets is becoming increasingly evident. Currently, about 10 listed companies hold Ethereum, accounting for 2.3% of the circulating supply. Notably, some businesses do not just hold ETH as a reserve asset but also actively participate in staking to yield returns or leverage DeFi solutions to optimize capital flow. This is a significant difference from Bitcoin, which is often held by companies merely as a form of 'digital gold'.
The third factor relates to the legal framework for liquidity staking. Although there has been no official statement, the SEC has unofficially signaled that liquidity staking products are unlikely to be classified as securities. This message, while more of a 'legal sociology' than a binding statement, has helped mitigate the biggest concern of institutions when considering capital allocation into Ethereum.
Finally, the physical delivery ETF mechanism – applied to both Bitcoin and Ethereum – provides a distinct advantage for ETH. Allowing investors to buy and sell ETF certificates with the crypto asset itself instead of cash not only minimizes costs and increases efficiency but also prevents the risk of mass sell-offs when capital outflows are strong. For Ethereum, this is even more critical due to the liquidity tied to the vast DeFi ecosystem, where institutional capital can be effectively rotated instead of being forced to convert to fiat currency.
In summary, these four factors have created a structural advantage for Ethereum: both as a yield-generating investment asset and widely accepted in businesses, with increasingly clear legal protections and possessing a more optimal ETF mechanism. This is the foundation for ETH to rise to compete directly, even challenging Bitcoin's position, which has long been considered 'invulnerable'.
Ethereum still has plenty of room to grow
Although Bitcoin still plays a symbolic role and is the 'core asset' in the portfolios of most institutions, JPMorgan's analysis shows that Ethereum has much broader growth potential. Three key factors – the rapid expansion of ETF funds, the increasing number of businesses adding ETH to their balance sheets, and a more transparent legal environment – are forming a solid foundation for Ethereum to become the focal point for capital flows in the upcoming period.
If this trend continues, Ethereum has the potential not only to lead a new 'altcoin season' but also to directly challenge Bitcoin's long-standing dominance, especially in two areas: the derivatives market and institutional capital flows. These are sectors that significantly influence market structure, where the shift of capital often signals new growth cycles.
In the perpetual futures market, Ethereum's superiority is not merely a short-term phenomenon. It clearly reflects a change in the strategy of speculators, while affirming that both institutional capital and the legal framework are on the side of ETH. As the cryptocurrency market enters a new cycle, Ethereum is gradually becoming the central factor: no longer just the 'king of altcoins' signaling trends, but the main force shaping the development trajectory of the entire market.