The price increase of Ethereum (ETH) is not coming from capital flowing out of Bitcoin (BTC), but rather from entirely new money entering the market.
Ethereum (ETH) surged from $2,398 to $3,850 with a striking increase of 60.55% in July. This rapid rise has resonated significantly within the crypto community, leading to frequent discussions on social media about claims that "investors are moving from Bitcoin to Ethereum." So, do on-chain data support these claims?
The Bitcoin Realized Cap metric shared by a CryptoQuant analyst provides an important clue in this regard. Bitcoin Realized Cap shows the actual market value calculated based on the last transaction price of all BTC in circulation. If investors were reducing their Bitcoin positions to buy Ethereum, a decline in this metric would be expected.
However, on July 25, the Bitcoin Realized Cap reached its all-time high of $1.018 trillion. This indicates that there has not been a significant capital shift from Bitcoin to Ethereum; rather, the capital flowing into Bitcoin is still increasing.
New money is flowing into Ethereum.
The rise in Ethereum is not due to investors selling their Bitcoin assets to turn to Ethereum, but rather it stems from entirely new capital inflows driven by the growing appeal of the Ethereum ecosystem. Ethereum continues to capture investors' interest, particularly because of the ecosystem's growth potential.
As a result, according to the data pointed out by the CryptoQuant analyst, the recent rise in the price of Ethereum is not due to Bitcoin sales but is entirely the result of new investors channeling capital into the Ethereum ecosystem. The real rise of Ethereum may just be beginning.