US Bitcoin exchange-traded funds (ETFs) have captured a commanding share of spot trading volumes, regularly generating $5-10 billion in daily activity that rivals major crypto exchanges, according to CQ Julio, Head of Research at CryptoQuant.
The surge comes as Ethereum ETFs experience massive momentum, with $4 billion in net inflows in August.
Binance Still Leads, But ETFs Challenge Exchange Dominance
Bitcoin ETFs now account for 13.1% of total spot trading volume since the US presidential election, making them the third-largest trading venue behind Binance’s dominant 29.1% and Crypto.com’s 13.5% shares.
Source: CryptoQuantCryptoQuant data reveals that these funds regularly exceed those of most centralized exchanges in daily volume, with peak activity reaching $10 billion during high-volatility periods.
Source: CryptoQuantBinance maintains its leadership position with Bitcoin volumes reaching $10-18 billion on active trading days.
During Bitcoin’s recent all-time high on August 13, Binance recorded $7 billion in spot volume compared to ETFs’ $4.8 billion.
Other major exchanges include Bybit, with a 9% market share, Coinbase at 6%, and Bullish, which commands 5%.
However, Ethereum paints a starkly different image. ETFs capture merely 4.4% of ETH spot trading volume.
Binance dominates Ethereum trading with a 35% market share since November, followed by Crypto.com at 20% and Bybit at 6%.
ETF Flows Signal Major Institutional Rotation Into Ethereum
Ethereum ETFs extended their winning streak to seven consecutive days by August 28, accumulating $309 million in fresh inflows. BlackRock’s ETHA dominated with $262.6 million, while Fidelity’s FETH added $20.5 million.
Notably, Grayscale’s flagship ETHE recorded rare positive flows of $5.7 million after months of heavy redemptions.
The momentum shift is becoming even clearer. Matt Hougan’s analysis of August flows reveals that Bitcoin ETFs recorded net outflows of approximately $800 million, while Ethereum ETFs attracted $4 billion in net inflows.
This $4.8 billion monthly differential favoring ETH particularly points to a decisive institutional preference rotation.
Bitcoin ETFs maintained steady but modest progress with $81 million in daily inflows on August 27. BlackRock’s IBIT led with $50.9 million, supported by Fidelity’s FBTC at $14.6 million.
Total Bitcoin ETF assets reached $144.6 billion, representing 6.5% of Bitcoin’s market capitalization. Meanwhile, Ethereum ETFs hold $30.17 billion, equivalent to 5.4% of Ether’s market capitalization.
Corporate treasury activity accelerated the institutional shift. BitMine Immersion Technologies acquired $2.2 billion worth of ETH in a single week, becoming the world’s largest corporate Ethereum holder with 1.7 million ETH valued at $8.82 billion.
Market analysts note that declining Bitcoin dominance, below 58%, is attributed to over 45 altcoins outperforming BTC in the past 90 days.
The Altseason Index surged to 61 after months below 55, with full-scale altseason typically beginning at 75.
Just yesterday, Michaël van de Poppe also predicted altseason will commence within 4-6 weeks, potentially driving ETH to $5,200 and SOL to $250 in Q4.
Corporate Bitcoin Treasury Strategies Face Credit Cycle Risks
Corporate Bitcoin holdings have exploded to $408 billion across 310 entities, but new research warns this “dangerous game” will likely see most participants fail during a full credit cycle.
Sentora’s analysis identifies critical flaws in strategies that involve “borrowing billions in fiat, issuing new equity, and restructuring entire balance sheets to acquire Bitcoin.”
The research categorizes Bitcoin treasury strategies as “negative-carry trades” where companies borrow fiat to acquire non-yielding assets.
Unlike traditional carry trades with positive yield cushions, Bitcoin strategies offer “no yield cushion, no neutral carry, and no risk-parity ballast.”
MicroStrategy pioneered the model, utilizing $3.7 billion in ultra-low-coupon convertible bonds and $5.5 billion in perpetual preferred shares.
The research warns of structural risks when “interest payments become unserviceable, refinancing costs spike, equity issuance turns non-accretive, and boards question the Bitcoin strategy itself.”
Rising interest rates amplify negative carry effects, while Bitcoin price stagnation over 2-3 years could erode conviction and make equity issuance dilutive.
The study notes “there is no lender of last resort, no circuit breaker, and no refinancing facility” when Bitcoin carry trades break, making risks “binary and reflexive.”
The research concludes that for long-term success, “Bitcoin must evolve from digital property to digital capital” that generates yield without custodianship requirements.
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