Ethereum Surpasses Bitcoin in Liquidity Growth

Bitcoin's August rally was impressive, with the cryptocurrency closing over 25% higher than the previous month. However, this growth has not been matched by the stablecoin market cap, which only rose by 0.5%. This slow pace of liquidity inflow is evident on-chain as well, where Bitcoin's 45% rise from its recent low is accompanied by a lack of spot demand.

Liquidity across exchanges is also weak, with Binance's stablecoin reserves dropping nearly $7 billion from their cycle peak above $50 billion. This technical structure may turn bullish for Bitcoin, but it remains vulnerable to a long squeeze if the price reaches $80k, especially with the FOMC meeting approaching.

However, Ethereum is seeing more significant liquidity growth, driven by both speculative demand and on-chain utility. The total stablecoin supply in Euro minted on the Ethereum blockchain has increased by 347.3% over the past three years to reach $848.1 million, with Ethereum hosting 69.4% of the total.

Furthermore, staking ETH is at an all-time high, with 42.95 million ETH or $105.96 billion deposited across all validators, representing 35.21% of ETH's supply. This increased demand for Ethereum is also reflected in its rising liquidity and capital inflows, which could help drive an altcoin rally in Q4.