ETH's Rising Liquidity Threatens to Steal BTC's Spotlight
While Bitcoin's price has risen significantly in recent months, its liquidity and spot demand remain muted. Despite closing August over 25% higher than the previous month, making it its best monthly performance since November 2024, the stablecoin market cap only grew by 0.5%. This suggests that the inflow of liquidity is happening at a slow pace.
The same pattern is evident on the on-chain level, with Bitcoin rising by around 45% from its recent low, but there is a lack of spot demand, as evidenced by the 90-day CVD being neutral. Liquidity across exchanges is also weak, as seen in Binance's stablecoin reserves, which dropped nearly $7 billion from their cycle peak above $50 billion.
Ethereum, on the other hand, is seeing a significant increase in liquidity and capital inflows. The total stablecoin supply in the Euro minted on the Ethereum blockchain increased by 347.3% over the past three years to reach $848.1 million, with Ethereum hosting 69.4% of the total, surpassing all other blockchains combined by more than double.
The amount of ETH staked saw yet another ATH, specifically 42.95 million ETH or $105.96 billion were deposited across all validators, representing 35.21% of ETH's supply. This helps explain why the ETH/BTC ratio keeps trending higher.