Institutional altseason: Ethereum soars as Bitcoin faces market pressure

The digital asset landscape is currently experiencing a dynamic period, marked by shifting market sentiments, significant institutional maneuvers, and an accelerating pace of regulatory evolution. While some major cryptocurrencies faced downward pressure in recent weeks, others demonstrated resilience, fueled by heightened institutional interest and strategic capital deployment. Concurrently, the artificial intelligence sector continues to attract substantial investment, signaling a broader technological transformation that intersects with and influences the financial world.

Market Dynamics: Bitcoin and Ethereum Performance

August concluded with contrasting performances for leading cryptocurrencies. Bitcoin experienced a 6.5% decline, aligning with historical patterns that often see August as a challenging month for the asset. Conversely, Ethereum registered an impressive 18.78% gain, maintaining a positive trajectory for two consecutive months, potentially driven by increased institutional engagement within its ecosystem and a perception of being undervalued. Market analysis for the first week of September showed continued volatility for both assets, with Bitcoin generally moving upward with minor dips, while Ethereum exhibited greater price swings.

Experts present a divided outlook on Bitcoin’s near-term trajectory. Analysts at Bitfinex Alpha interpret a 13% drop from recent highs as a significant indicator, projecting further correction towards a localized floor in the $93,000-$95,000 range. Similarly, Anton Krupsky of FxPro anticipates a September correction, citing historical data and the asset’s current vulnerabilities. In contrast, Tephra Digital analysts maintain a bullish long-term perspective, suggesting Bitcoin could breach $167,000-$185,000 if its correlation with the growing M2 money supply and gold persists. Adding to market pressure, Glassnode data indicated that long-term Bitcoin holders executed their largest single-day sell-off of the year, offloading 97,000 BTC valued at nearly $3 billion, which contributed to recent price declines.

For Ethereum, Joseph Lubin, founder of Consensys and a prominent industry voice, articulated a highly optimistic forecast, predicting a potential 100-fold increase in Ethereum’s value. Lubin posits that widespread adoption by Wall Street could elevate Ethereum to replace Bitcoin as the primary “monetary base” in the digital economy.

Institutional Engagement and Digital Asset Treasuries

Institutional activity in both Bitcoin and Ethereum ecosystems remains robust. Major corporate entities continued to bolster their digital asset treasuries:

• Strategy, the largest corporate holder of Bitcoin, acquired an additional 4,048 BTC for $450 million. The company also qualified for inclusion in the S&P 500 index, a significant milestone for a firm with substantial Bitcoin holdings.
• Metaplanet, a leading public Bitcoin holder in Asia, expanded its portfolio by 1,009 BTC and announced ambitious plans to accumulate 210,000 BTC by 2027.
• Treasury BV secured $147 million in a private round led by Winklevoss Capital and Nakamoto Holdings, earmarking the funds specifically for Bitcoin acquisitions.
• Digital healthcare solutions developer CIMG raised $55 million with the explicit goal of establishing a Bitcoin treasury.

The Ethereum ecosystem also saw substantial institutional investment:

• Ether Machine raised $654 million in Ethereum before its Nasdaq listing.
• Etherealize obtained $40 million to facilitate Ethereum’s integration into traditional finance.
• BitMine increased its crypto treasury by purchasing $65 million worth of Ethereum.
• A company founded by Alibaba’s Jack Ma established an Ethereum treasury, investing approximately $44 million into the asset.

Further demonstrating shifting market dynamics, a notable whale investor executed a series of large-scale operations, reportedly divesting significant Bitcoin holdings to accumulate nearly $4 billion in Ethereum, following a period of dormancy. Concurrently, the Ethereum network experienced record-high staking queues on September 4, 2025, with entry requests surpassing exits for the first time since July 2025, reaching levels not seen since the Shanghai upgrade in 2023.

Digital Asset Funds and Regulatory Outlook

The landscape for digital asset exchange-traded funds (ETFs) continues to evolve. From August 25 to 29, 2025, spot Ethereum ETFs recorded a cumulative inflow of $1.08 billion, marking the fourth-largest weekly inflow since their inception. Bitcoin-based funds saw inflows totaling $440.7 million during the same week. However, the first week of September (September 1-5, 2025) presented a mixed picture for spot Bitcoin ETFs, with two days of outflows balancing two days of inflows. The Ethereum ETF segment, however, experienced a challenging week, with outflows recorded every day, peaking at $446.71 million on September 5.

Looking ahead, Sonic Labs, developers of a layer-1 network, received community approval for a plan to enter US capital markets and launch a regulated ETF. The initiative aims to raise $150 million to strengthen its presence in traditional finance and enhance the appeal of its native Sonic (S) token. However, James Seyffart, a Bloomberg Intelligence analyst, suggested that while altcoin ETF approvals are emerging, they may not trigger a broad “altseason.” He posits that an “institutional altseason” driven by Digital Asset Treasuries (DATs) is already underway, viewing DATs as more impactful than single altcoin-based funds.

Global Regulatory Developments

Regulatory frameworks for digital assets are advancing across various jurisdictions. In Ukraine, the Verkhovna Rada (parliament) supported draft law 10225-d concerning crypto assets in its first reading. This legislation aims to establish a comprehensive framework for the crypto sector in Ukraine, including asset classification, regulatory authority, and oversight mechanisms. This initiative moves forward despite the National Bank of Ukraine’s (NBU) explicit stance against incorporating crypto assets into its reserves, a position reiterated by First Deputy Head Sergii Nikolaychuk, citing alignment with the European Central Bank’s opposition to such practices.

In the United States, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced a joint initiative, “Project Crypto” and “Crypto Sprint,” to coordinate efforts. The goal is to establish clear procedures for US exchanges to launch trading of specific spot crypto products. Concurrently, Polymarket, a prediction market platform, received regulatory clearance from the CFTC, enabling its launch in the US market. Across the Atlantic, European Central Bank President Christine Lagarde called for stricter regulation of certain stablecoin issuers, particularly those employing mixed issuance schemes involving both European and non-European counterparties, citing increased risks for EU-based issuers under MiCAR regulations.

Key Industry Updates and Technological Advancements

Beyond market and regulatory shifts, several significant developments unfolded. The token for the World Liberty Financial (WLFI) platform experienced a tumultuous debut on centralized exchanges. Following an initial price drop, the team attempted stabilization through buyback and burn mechanisms. Subsequent volatility led to a controversial incident where an address linked to Justin Sun was blacklisted for a transfer of 50 million WLFI (approximately $9 million at the time), though Sun stated these were test deposits. The WLFI team later reported blocking 272 wallets, primarily for suspected suspicious activity.

In broader industry metrics, a Chainalysis report positioned Ukraine as first globally in crypto activity relative to its population, and eighth overall across 151 surveyed countries. However, a report from the Royal United Services Institute estimated Ukraine lost $10 billion in potential tax revenue from crypto asset operations. On the corporate finance front, cryptocurrency exchange Gemini is planning an initial public offering (IPO) in the US, aiming to raise up to $317 million and valuing the company at $2.2 billion.

The artificial intelligence sector saw a massive influx of capital, with AI developer Anthropic securing $13 billion in a Series F funding round, pushing its post-investment valuation to $183 billion. This funding, led by Iconiq, Fidelity Management & Research Company, and Lightspeed Venture Partners, is earmarked for corporate solution expansion, safety research, and international growth. In another notable debut, American Bitcoin, a company predominantly controlled by Eric Trump and Donald Trump Jr., alongside miner Hut 8, began trading on Nasdaq with over 16% gains. Eric Trump’s 7.5% stake in the newly public entity reportedly elevated him to billionaire status.

Other significant events include August losses from hacker attacks exceeding $163 million for the industry, the development of an AI-powered stethoscope capable of detecting heart diseases in 15 seconds, and Ukraine’s introduction of a national AI assistant, Diia.AI, for public services. Additionally, monthly trading volume on crypto exchanges reached a high of over $1.8 trillion in August, and Trump Media acquired $105 million worth of CRO tokens.