The report noted that the shift represents a measured rotation of institutional liquidity following Bitcoin’s all-time high formation.
Bitcoin declined 4.5% from the weekly open on Aug. 18 until Aug. 22, sliding 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, BTC lost the $110,000 threshold and is priced at $109,795.71.
Federal Reserve Chairman Jerome Powell’s dovish remarks at Jackson Hole triggered a sharp rebound in risk assets, sparking a broad-based short squeeze across crypto.
Ethereum led the recovery, surging to a new all-time high of $4,958.70 on Aug. 24 and demonstrating its role as a liquidity driver for institutional markets.
Spot ETH ETFs registered $197 million in outflows on Aug. 18 alone, marking the third-largest daily exit on record. However, Ethereum treasury companies absorbed substantial selling pressure, with preliminary estimates suggesting meaningful institutional support.
Corporate treasuries, including SharpLink Gaming, Bitmine Immersion Technologies, and BTCS, accelerated accumulation, with on-chain treasury balances exceeding $10 billion. The report noted that the rotation reflects softer capital inflows into Bitcoin following its Aug. 14 all-time high of $123,640.
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, indicating more cautious investor appetite.
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, though capital allocation has become more selective.
Solana climbed above $200 to reach $212.60 as the broader digital asset class 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, Bitfinex expects Bitcoin to remain range-bound while Ethereum attracts heightened institutional demand, mirroring Bitcoin’s dynamic from early 2024.
The report anticipated more significant capital rotation into higher-risk altcoins later in the cycle, with broader market re-rating dependent on renewed Bitcoin ETF inflows and new altcoin investment vehicles.
