Capital Shift? Ethereum ETFs Surge as Bitcoin ETFs Cool Off

While the 12-day inflow streak for spot Bitcoin ETFs ended, the same cannot be said for their Ethereum counterparts. In fact, spot Ethereum ETFs have extended their 12-day inflow streak.

On July 21 alone, spot BTC ETFs saw $131 million in outflows. This represented the first net withdrawals during this rally toward Bitcoin’s all-time high, while spot ETH ETFs recorded $297 million in inflows.

Divergence in ETF Flows

CryptoRank stated that the divergence could simply reflect institutional investors taking profits after Bitcoin’s 10% gain in July and over 25% rise year-to-date, which is a logical rebalancing after a strong run.

Spot Bitcoin ETF 12-day inflow streak ended.

Spot Ethereum ETF 12-day inflow streak continues.

On July 21, the market saw $131M in outflows from $BTC Spot ETFs and $297M in inflows into $ETH Spot ETFs.

Is this the beginning of a market shift? pic.twitter.com/2EE8E8KBh4

— CryptoRank.io (@CryptoRank_io) July 22, 2025

Another factor could be capital rotation, with BTC’s growth pausing at ATH levels and investors seeking alternative large-cap opportunities like Ethereum. ETH ETFs continue to attract capital, with record inflows of $726 million on July 16 and $297 million on July 21, which pushed cumulative new inflows to $7.78 billion.

Additionally, ETH has surpassed BTC in terms of daily derivatives volume over the past week as well, which reflects strong trading activity. Ethereum appears to be benefiting from capital rotation, ETF-driven FOMO, and a potential altseason, with the altseason index near 60, its highest in months.

While these signs reflect a potential pivot in investor sentiment, CryptoRank noted there is nothing bearish in BTC’s current outflows. The analytics firm views them as standard rebalancing rather than a sign of weakening fundamentals. Overall, the continuation of ETH ETF inflows amid Bitcoin’s pause could mark the beginning of a market rotation toward Ether and large-cap alts.

Near-Term Pullback Concerns

However, as Ethereum continues to attract institutional flows, some investors are questioning if its recent momentum could lead to a near-term pullback.

Despite the concerns, analysts note the current market is far from overheating. Compared to the futures market peaks in March and November 2024, Ethereum’s present positioning appears modest, which means that any pullback would likely be shallow and brief.

Throughout this cycle, the altcoin’s price action has remained sluggish despite an ongoing uptrend. It even dipped into undervalued territory before clearly bottoming out. This positions Ethereum for further upside potential in the second half of 2025. As such, Ethereum’s continued climb could set the stage for altcoins to surge, a pattern that typically signals the arrival of altseason.