Over the past year, the amount of Ethereum (ETH ($4,042.03)) funds held by institutions has grown almost four times faster than that of Bitcoin (BTC ($113,753.00)).
According to analysts, this change in allocation could indicate a growing institutional belief in Ethereum’s clear role alongside Bitcoin as a major digital asset.
A remarkable shift in institutional strategy
Data shared by XWIN Research Japan shows that institutions are clearly building their positions in different ways. Bitcoin fund holdings grew by 36% over the course of a year, reaching approximately 1.3 million BTC. Meanwhile, Ethereum rose even more remarkably over the same period, with institutional holdings of the world’s second-largest cryptocurrency by market capitalization rising 138%, bringing the total to around 6.8 million coins.
This rapid growth is linked to the launch of spot Ethereum ETFs and the fundamental use of the crypto asset in decentralized finance (DeFi) and other digital applications. The data shows that Ethereum is now seen as a major institutional holding, and not just a secondary holding. The ratio of ETH to BTC in funds has changed from three to one to five to one, indicating that the strategy may have changed for good, and not just for a short time.
“The continuation of this divergence will depend on ETF flows, on-chain activity trends and broader liquidity conditions in global markets,” the research firm wrote.
A recent report supporting this trend shows that major Ethereum investors have started buying the asset again after selling it for a while. Tom Lee of Bitmine, which has one of the largest ETH government bonds in the world, recently said the market is primed for a possible year-end rally now that excessive debt is less prevalent.
Market reaction and price analysis
While the holding data is very good for ETH, current market prices tell a more nuanced story. The asset changed hands at $4,114 at the time of writing, which is down 1.8% in the last 24 hours. Market watchers like Daan Crypto Trades have said that Ethereum is going through a “major test” around its previous cycle highs. This means that the bulls need to stay above $4,100 to regain momentum.
Meanwhile, Bitcoin was priced at $114,198. The recent break above $115,000 has some analysts cautious. TedPillows says this happened without “institutional support, without new capital and without retail FOMO,” calling it a “liquidity grab.” This aligns with on-chain data from analyst PelinayPA, who pointed out that real fund movements on exchanges are near record lows, which historically has occurred near market peaks.
Despite this near-term uncertainty, the sheer amount of capital in the crypto markets remains enormous. As previously reported, Bitcoin futures volume on Binance reached $543 billion in October alone, indicating strong institutional and speculative interest. Some observers believe that the underlying growth of institutional holdings for both assets, especially Ethereum, could provide a strong foundation for the market’s next phase.
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