Is Bitcoin Losing Momentum? Ethereum Attracts Institutional Capital

While the crypto market is driven by a bullish cycle, a silent shift is occurring: Ethereum seems to be gaining ground against a slowing Bitcoin. Supported by clear institutional signals and a more favorable yield mechanism, the momentum of ETH is no longer just a market rotation, but a structural repositioning. This possible hierarchy reversal, backed by concrete indicators, reshapes the power dynamics within the crypto ecosystem.

Bitcoin Tested by Its Own Limits

While it continues to attract massive institutional flows, Bitcoin now seems to reach a plateau where its growth could mechanically slow down. This is suggested by several analysts.

Thus, Marcin Kazmierczak, co-founder and COO of Redstone, warns about the natural limits related to the asset’s growing size. He explains:

Bitcoin’s dominance faces natural capping effects as market capitalization increases. A simple calculation suggests a decline in institutional flow returns at current allocation levels.

Here are the main observations reflecting this inflection:

• A performance ceiling: with a market capitalization approaching 2,000 billion dollars, BTC enters a zone where each new billion invested has proportionally less impact on its price, thus reducing the marginal impact of incoming flows.

• An institutional model already widely deployed: several companies, like Trump Media and Strive, have adopted a treasury strategy modeled on Strategy, focused exclusively on Bitcoin. This leaves little room for short-term surprises on this front.

• A dominance that slows the altseason: although some anticipated a massive rebound of altcoins, BTC’s persistent strength continues to hinder this scenario, at least temporarily.

• A new capital distribution in the making: according to Jag Kooner, head of derivatives at Bitfinex, “capital is not leaving Bitcoin but accumulating on the L1s”. This capital, far from fleeing the market, is progressively diversifying within layer one blockchains, led by Ethereum.

• An expected stabilization of BTC’s strength: for Kooner, this phenomenon might mark the beginning of “phase 3 of the bullish cycle”, where Bitcoin ceases to be the market’s sole locomotive, making way for other assets in the ecosystem.

These elements reflect an ambivalent situation for BTC. It remains the backbone of crypto valuation, but its bullish potential now faces arithmetic and structural constraints.

This context opens space for other assets able to capture the attention and capital of investors seeking yield and growth, such as Ethereum.

Ethereum, a New Magnet for Institutional Capital

While Bitcoin’s progress seems to slow, Ethereum leverages its solid fundamentals to attract the attention of institutional investors. May was particularly revealing, with ETH/BTC rising by more than 30%, a performance coinciding with the technical success of the Pectra update.

However, beyond the technical momentum, it is the growing interest from institutional players that gives shape to this dynamic. The case of SharpLink Gaming is emblematic. The company has just announced a private placement of 425 million dollars to initiate a treasury strategy focused exclusively on Ethereum.

This strategic shift rests on clear arguments. For Kazmierczak, “Ethereum benefits from a clearer institutional investment thesis (programmable money, DeFi infrastructure) compared to most altcoins”.

Unlike other more speculative altcoins, ETH offers a rational and structured investment proposition centered on the value of its ecosystem. Added to this are concrete economic incentives such as yields from staking, now seen as a diversification lever by professional investors.

Some market players anticipate that the ETH price could reach 3,000 dollars as early as June.

This strategic orientation could profoundly reshape capital flows in the months to come. If the current momentum continues, the year 2026 could see acceleration of what Kazmierczak describes as an “institutional rotation” towards Ethereum, driven by its technological advances, such as EIP-7928, and its financial maturity. Such a trend could strengthen Ethereum’s independence from Bitcoin and accelerate the redefinition of the balance of power between the two assets.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.