Bitcoin vs Ethereum: Behind BTC's Growing Dominance - This Week's Key Metrics

Bitcoin outperformed all crypto-assets in the top 10 by market cap over the past seven days. As a result, Bitcoin's dominance has climbed to 45%, the highest it's been since August based on CoinMarketCap data.

The recent move up has been propelled by growing institutional interest as evidenced by on-chain and derivatives data. 

Large transactions

the amount of transactions worth over $100,000 taking place on a given day. Due to their magnitude, large transactions act as a proxy to institutional activity. 

• The number of Bitcoin large transactions hit a four-month high, with over $240B transferred per day three days in a row 
• This highlights growing appetite among institutions investing in Bitcoin

This trend is epitomized by the recent announcement of George Soros' fund owning Bitcoin, with their CEO stating "it's crossed the chasm to mainstream". 

Along with these news, there appears to be a growing optimism in the chances of a Bitcoin ETF being approved as early as this month. With four futures-backed Bitcoin ETFs awaiting a decision over the next three weeks, Eric Balchunas, Senior ETF Analyst at Bloomberg gives it a 75% chance of one being approved in October. 

The positive expectations behind this anticipated event have fuelled derivatives.

Funding rate

Perpetual swaps, which are the most traded crypto derivatives, use a funding rate to artificially peg prices of perp contracts with spot prices. When funding rates are positive, it means they are priced at a premium and long holders have to pay short holders a fee. 

• Funding rates across the three most traded exchanges reached their highest since May prior to the crash
• Long holders being willing to pay the funding fee to buy Bitcoin perpetuals signal the positive expectations for price
• Still, funding rates remain significantly lower than they were throughout February or April

Overall, Bitcoin has been gaining strength by many metrics over the past few weeks. The upcoming ETF decisions and funding rates are likely to remain in savvy investors' radar in the near future as Bitcoin gathers momentum. 

This Week's Key Metrics

Bitcoin BTC

Price

$53,800 (+23.7%)

Weekly Fees

$4.77M (+32.1%)

Exchanges Netflows

-$100.9M (-202%)

Ethereum ETH

Price

$3,550 (+22.4%)

Weekly Fees

$242.5M (+26.2%)

Exchanges Netflows

+$306M (+141%)

Weekly Fees

Sum of total fees spent to use a particular blockchain in a week. This tracks the willingness to spend and demand to use Bitcoin or Ether.

• Both Bitcoin and Ether registered double-digit increases in fees, showing growing demand to transact in their blockchains

Exchanges Netflows

The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges over the past seven days. Crypto going into exchanges may signal selling pressure, while withdrawals potentially point to accumulation.

• $100M worth of Bitcoin left centralized exchanges, suggesting investors are looking to hold
• $306M worth of Ether was deposited into exchanges, compared to $750M being withdrawn last week