A Bitfinex report anticipated that more significant capital rotation into higher-risk altcoins would occur later in the cycle. According to Bitfinex Alpha’s Aug. 25 report, Bitcoin (BTC) is consolidating near current levels as capital inflows are extended along the risk curve toward Ethereum and broader altcoins.
It was noted in the report that the shift represents a measured rotation of institutional liquidity following Bitcoin’s all-time high formation.
A 4.5% decline in Bitcoin occurred from the weekly open on August 18 until August 22, as it slid to local range lows as investors de-risked ahead of the Federal Reserve’s Jackson Hole symposium.
The asset reached $111,990 amid renewed weakness in US spot exchange-traded funds (ETFs) flows, with Bitcoin ETFs recording $1.18 billion in net outflows over the week. As of press time, the $110,000 threshold was lost by BTC and it is priced at $109,795.71.
A sharp rebound in risk assets was triggered by Federal Reserve Chairman Jerome Powell’s dovish remarks at Jackson Hole, sparking a broad-based short squeeze across crypto.
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Ethereum Leads Market Recovery with New All-Time High
The recovery was led by Ethereum, which surged to a new all-time high of $4,958.70 on Aug. 24 and demonstrated its role as a liquidity driver for institutional markets.
On August 18 alone, $197 million in outflows were registered by spot ETH ETFs, marking the third-largest daily exit on record. However, substantial selling pressure was absorbed by Ethereum treasury companies, with preliminary estimates suggesting meaningful institutional support.
Corporate treasuries, including SharpLink Gaming, Bitmine Immersion Technologies, and BTCS, accelerated their accumulation, with on-chain treasury balances exceeding $10 billion. It was noted in the report that the rotation reflects softer capital inflows into Bitcoin following its Aug. 14 all-time high of $123,640.
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Bitcoin’s realized cap expanded at 6% per month during the current move, compared to 13% monthly growth during late-2024 breakouts above $100,000, which indicates a more cautious investor appetite.
Macro Signals Remain Supportive for Digital Assets
Global liquidity conditions remain supportive, with the combined M2 money supply from major central banks approaching $100 trillion. The structural upward trend in global liquidity reinforces the long-term bullish case for digital assets, although capital allocation has become more selective.
Solana climbed above $200 to reach $212.60 as the broader digital asset class was pushed higher alongside equities, reflecting tightening correlations between crypto and traditional risk assets. Meanwhile, network development continues to advance, showcased by DBS Bank’s recent tokenized note issuance on Ethereum.
In this backdrop, it is expected by Bitfinex that Bitcoin will remain range-bound while Ethereum attracts heightened institutional demand, mirroring Bitcoin’s dynamic from early 2024.
The report anticipated that more significant capital rotation into higher-risk altcoins would occur later in the cycle, with broader market re-rating dependent on renewed Bitcoin ETF inflows and new altcoin investment vehicles.
