Ethereum (ETH) had an amazing July, jumping over 60% from around $2,400 to a high of $3,941. Interestingly, this wasn’t just money moving from Bitcoin (BTC) to ETH, as some thought.
Fresh Capital Fuels Ethereum’s Rise
Data analyst Carmelo Aleman showed that the ETH rally wasn’t caused by investors selling BTC. He used on-chain data, specifically Bitcoin’s Realized Cap, to make his point. The Realized Cap shows the total value of all BTC based on the price each coin last traded at. It gives a clearer picture of actual investment in Bitcoin.
Aleman’s data showed Bitcoin’s Realized Cap hit a new all-time high of $1.018 trillion on July 25th. This means money was still flowing into Bitcoin, not out of it. Even as Ethereum’s price soared, Bitcoin’s Realized Cap continued to climb, albeit slowly. Aleman noted that Bitcoin price pauses often mean people are accumulating, which usually leads to big price increases later.
Ethereum’s Own Success Story
Aleman also pointed out that Ethereum’s success is due to its own growing ecosystem. July saw a huge increase in interest in Ethereum, reflected in its price jump.
More Evidence of Ethereum’s Growth
Several things back up the idea that new money is pouring into Ethereum:
- DeFi Boom: The total value locked (TVL) in Ethereum’s decentralized finance (DeFi) platforms soared from $49 billion to $84.6 billion between April and July.
- Network Activity: Daily transactions on the Ethereum network climbed steadily, hitting almost 1.48 million on July 27th.
- Shrinking Supply: The amount of ETH on centralized exchanges dropped by a million coins, suggesting a potential supply shortage.
- Liquid Staking Surge: A record high of 35.5 million ETH was locked in liquid staking protocols.
At the time of writing, ETH is trading around $3,772.
