Ether Outpaces Bitcoin Amid Rising Institutional Demand and Tokenization Growth

Ether (ETH) is leading the charge among major cryptocurrencies, gaining 5% in the past 24 hours and signaling a potential push toward its all-time high, driven by fresh institutional inflows and growing interest in tokenized assets.

Bitcoin (BTC) remained steady above $109,500 during Wednesday’s Asian morning session, recovering from last week’s profit-taking phase. However, market focus has shifted sharply to ether, which is experiencing heightened volatility and record trading volumes on certain exchanges.

“Investors are finally recognizing Ethereum’s compelling investment case,” said Jeff Mei, COO of BTSE, in a message to CoinDesk. “While bitcoin trades near its all-time highs, Ethereum still has considerable upside, supported by its expanding role in tokenizing real-world assets like stocks, money-market funds, and U.S. Treasuries.” Mei added that it’s “highly likely Ethereum will reach or surpass its all-time high by year-end.”

Ether-focused ETFs have pulled in over $800 million in inflows over the past two weeks, significantly outpacing bitcoin’s under $400 million, according to SoSoValue data. This surge has pushed the gap between ether’s implied volatility and bitcoin’s to the widest level since late 2022, indicating expectations of larger price swings ahead.

Open interest in ether perpetual contracts on Kraken hit a record 30,000 ETH this week, Alexia Theodorou, Head of Derivatives at Kraken, told CoinDesk. “This reflects a notable rise in speculative activity around the world’s second-largest cryptocurrency,” she noted, while also cautioning that the market “has yet to develop a clear directional consensus,” as the long/short ratio remains below January’s peak.

Other altcoins added to the bullish sentiment, with Solana (SOL) gaining 4.7%, Cardano (ADA) rising 3.3%, and XRP climbing 2% to $2.30. Dogecoin (DOGE) also bounced back 3.7%, recovering all losses from last week.

Traders are closely monitoring the upcoming U.S. Consumer Price Index (CPI) release later Wednesday, a key event that could influence Federal Reserve policy expectations and shape risk appetite ahead of next week’s central bank meeting.