Productivity growth is shifting from Bitcoin to Ethereum, says Bit Capital’s Ha Duong. Which gives the second most valuable crypto asset a strong tailwind.
Bitcoin climbed above $124,000 for the first time in August 2025 – this historic jump fueled the entire crypto market. But while the headlines belonged to the industry leader, institutional capital flows were shifting in the background. It is becoming increasingly clear that Ethereum (ETH) becomes the driving force in the ecosystem, while Bitcoin retains and expands its role as an anchor of value.
Genius Act was a milestone
The decisive impetus for this development came with the Genius Act USA. This passed law marks a regulatory milestone: it defines a regulatory framework for Stablecoins and confirms their status as legitimate, systemically important financial primitives.
Since July 18, 2025, a consolidated and binding regulation for payment stablecoins has been in effect in the USA. It creates crucial legal certainty and is already acting as a catalyst for a broader one institutional Acceptance.
Stablecoins are crypto-native representations of government fiat currencies – currently accounting for around 99.8 percent of the total supply US dollars. Their integration into decentralized and traditional centralized financial system applications (Defi and Tradfi) establishes digital US dollars as a functional means of payment, strengthens the global dominance of the US dollar and generates structural demand in the bond market through US Treasury reserves.
New strategic options are emerging for banks, but also intense competition from non-bank issuers. All in all, the Genius Act represents the institutional maturation of a market whose economic relevance and use has long since exceeded Crypto trading go out.
Institutional investors are discovering Ethereum
This legal certainty strengthened Ethereum as the basic infrastructure for Defi and tokenization, i.e. the representation of real assets through digital tokens on one Blockchainto make them tradable and more liquid. It also opened the floodgates for institutional investors.
In July alone, Ether rose by an impressive 51 percent and in August by another 19 percent. This exceeded that performance of Bitcoin in the periods mentioned. At the end of August, Ethereum was trading close to all-time highs for the first time since the beginning of 2022 at prices of just under 4,900 US dollars.
At the same time, inflows into exchange-traded stocks reached Index funds (ETFs) on Ethereum hit a record $5.4 billion in July, a 366 percent increase from the previous month. Assets under management also exploded with an increase of 120 percent for ETH ETFs, while the increases in Bitcoin ETFs were comparatively moderate at 14 percent.
Ethereum treasury companies provided further positive momentum. These are listed companies that focus exclusively on accumulating Ethereum and thereby increasing their “ETH per share”. Similar to the company Microstrategy in the Bitcoin sector, in this case companies like Bitmine or Sharplink could have a positive price effect on Ethereum with their strong buying pressure.
Additionally, they help further solidify the narrative of Ethereum as a “productive treasury asset.”
Capital flows towards Ethereum
The data from on-chain analysis and ETF capital flows clearly show: capital is rotating out of Bitcoin and into Ethereum. This marks a new allocation logic in institutional Portfolios away.
- Bitcoin remains the “Store of Value“, i.e. a store of value, the digital one Gold and the balance sheet anchor of the crypto universe.
- Ethereum On the other hand, it can not only be hoarded, but also actively used. It has potential for returns through cash flows from Defi protocols, as the foundation of the token economy and through staking. Staking is a process in which network participants can receive rewards by locking their coins in crypto wallets. In doing so, they make these coins available to other network participants to validate transactions.
Conclusion: Crypto market is turning
Given the developments described, the crypto market is at a turning point. Bitcoin will retain its role as an underlying reserve and stable store of value, while the real productivity growth will come from Ethereum – driven by regulatory certainty, massive institutional inflows and the boom in Defi and tokenization.
About guest author Ha Duong:
Ha Duong is a director Crypto Strategies at Berliner Asset managers BitCapital. He manages them both there Fund Bit Global Crypto Leaders (ISIN: DE000A3CNGM3) and Bit Crypto Opportunity (ISIN: DE000A3CNGP6).