Ethereum ETPs experienced significant inflows while Bitcoin saw outflows, impacting market dominance and volatility.

Ethereum Leads Crypto Market as Bitcoin Dominance Declines

August 2025 saw a resurgence of volatility in the cryptocurrency market, marked by a significant shift in investor focus towards Ethereum (ETH). Data indicates a notable divergence in capital flows, with Ethereum ETPs attracting substantial inflows while Bitcoin (BTC) experienced outflows. Simultaneously, certain centralized exchange (CEX) tokens demonstrated exceptional gains, contrasting with the performance of listed CEX equities.

Diverging Capital Flows: ETH vs. BTC

ETH ETPs pulled in $4B while BTC saw $600M in outflows, helping push BTC dominance down from 65% to 57%.

Ethereum recorded over $4 billion in ETP inflows during August, contrasting sharply with Bitcoin's $600 million in outflows. This disparity contributed to a rare divergence in performance, with BTC experiencing a drawdown exceeding -10% for the first time since 2021 while ETH avoided such a decline. Several entities, including FG Nexus (+41k ETH), The Ether Machine (+10.6k ETH), and Aave DAO (+573 ETH), added significantly to their ETH treasuries during the month. Overall, ETH treasury strategies increased their holdings by +1.13% of the total ETH supply, compared to a +0.24% increase in Bitcoin treasuries.

CEX Tokens Outperform

OKB (+248%) and CRO (+112%) led August gains, far outpacing flat or negative returns in listed CEX equities like Coinbase and OSL Group.

OKB and CRO tokens significantly outperformed other assets, with gains of 248% and 112% respectively. OKX's strategic upgrades, including the adoption of Polygon's Pessimistic Proof and a one-time burn of 65.3 million OKB tokens, strengthened its market position. Crypto.com's partnership with Trump Media & Technology Group also positively impacted CRO's performance.

Market Volatility and Institutional Adoption

The crypto market experienced increased volatility in August, with BTC and ETH 30-day volatilities reaching 40% and 90%, respectively. The surge in Ethereum inflows is partly attributed to an increase in global risk appetite, favoring alternative cryptocurrencies. Furthermore, accelerated ETH purchases by companies maintaining Ethereum treasuries have contributed to this shift. Institutional adoption continues to rise, driven by regulatory clarity and technological advancements such as the U.S. CLARITY Act.

Ethereum's Glamsterdam Upgrade

EIP-7928, confirmed for the upcoming Ethereum Glamsterdam upgrade, aims to enhance network performance through the introduction of Block Access Lists (BAL), transaction indices, and post-execution values. This upgrade is anticipated to improve execution efficiency, potentially paving the way for shorter slot times, similar to Solana's parallel execution capabilities.

Broader Market Impact

The observed trends suggest a potential shift in market dynamics, with Ethereum gaining ground against Bitcoin. The outperformance of certain CEX tokens indicates strategic advancements and partnerships driving investor interest. Institutional adoption is set to continue, supported by regulatory clarity and ongoing technological developments.