ETH/BTC Ratio Peaks Amid ETF Inflows

Ethereum has outperformed Bitcoin recently, boosted by considerable inflows into spot ETFs and an increase in corporate treasury activity, according to a report from K33 Research dated August 19. Since June 1, Ethereum (ETH) has surged approximately 70%, compared to only about 9% for Bitcoin (BTC), pushing the ETH/BTC ratio above 0.037 to a new yearly high. K33 credits Ethereum's rise to a dual demand shock. Spot ETH ETFs in the US have attracted around $9.4 billion since June 2, and for the first time, digital asset treasury holdings surpassed 2% of circulating ETH, increasing from 0.2% just two months prior, based on data from The Block. Combining ETFs with digital asset treasuries (DATs), such as Tom Lee’s BitMine Immersion and Joe Lubin’s SharpLink Gaming, has absorbed nearly 3.7% of the total ETH supply since early June—a significant figure, given that ETH's market capitalization is only about one-fifth of BTC’s. Furthermore, there is concentrated demand for leveraged ETH exposure. VolatilityShares’ 2x Ether ETF has increased its ETH-equivalent exposure by approximately 456,000 ETH since June 2, now accounting for about 61% of CME ETH futures open interest as of August 18. On the Bitcoin side, there is evidence of a cooling in listed derivatives following recent macroeconomic surprises. July's Producer Price Index (PPI) rose by 0.9% compared to a consensus of 0.2%, which caused BTC prices to dip from around $121,000 to nearly $117,700 in a matter of minutes, contributing to over $1 billion in liquidations shortly afterward, as reported by The Block. CME Bitcoin futures premiums, which had briefly reached double digits, fell back to about 5.5% annualized by Monday. Notional CME open interest increased by approximately 4,800 BTC to around 143,000 BTC but remains close to early-May lows. Spot Bitcoin ETF assets reached a record $134.6 billion by the end of Q2, supported by price increases and revived institutional allocations. In August, however, weekly BTC net flows were generally muted, with average daily BTC spot volume around $3.4 billion and total futures and perpetual open interest around $59.4 billion. Despite a spike in daily spot activity on August 14, BTC's 90-day correlation with ETH remains elevated, suggesting ongoing volatility as significant resistance levels are approached.