Citi: Ethereum’s Comeback, Shaking Bitcoin’s Dominance?

Today, we’re breaking down Citi’s latest monthly crypto asset report, released on August 19, 2025, titled ETH Outperformance: What Lies Beneath.

The report focuses on Ethereum’s recent market performance, exploring why it has transitioned from a “laggard” at the start of the year to this year’s “leader.”

I. Ethereum’s Turnaround

Early in the year, amid U.S. tariff shocks and declining global risk appetite, Ethereum plummeted over 55%, significantly underperforming Bitcoin.

However, since the second half, Ethereum has staged a notable recovery, with year-to-date gains nearing +30%.

Citi emphasizes that this is not merely a technical rebound but is supported by capital and fundamentals.

II. Rising Market Share

Unlike previous cycles, as Bitcoin’s market dominance has waned, Ethereum’s share has surged, doubling since April. This signals that ETH is no longer a passive follower but is emerging as a leading force.

III. ETF and Institutional Buying

Spot Ethereum ETFs: Since May, net inflows have exceeded $13.9 billion, a sharp rise from $2.6 billion in April.
ETH Treasury Companies: Several listed companies have added ETH to their balance sheets, with cumulative holdings surpassing $10 billion, and their market caps have recently expanded significantly.

The combined effect of ETF and corporate buying has stabilized ETH’s funding structure.

IV. On-Chain Data and Chip Changes

Whale Accumulation, Retail Exit: Wallets holding over 10,000 ETH are increasing their positions, while retail addresses are decreasing.
Exchange Balances Drop: ETH is flowing back from centralized exchanges to the blockchain, creating a “supply squeeze” effect.
Increased On-Chain Activity: Ethereum’s active addresses have risen sharply since June, with low transaction fees laying the groundwork for future tokenization and DeFi applications.

V. Citi’s Assessment

Citi views Ethereum’s rise as more than short-term speculation, driven by ETF inflows, institutional allocations, and heightened on-chain activity. Whether it can continue to outperform Bitcoin hinges on:

Whether global markets maintain a “Goldilocks” moderate environment;
Whether regulatory policies remain favorable to crypto assets;
Whether investors embrace ETH as “DeFi infrastructure” value.
On the risk side, Citi warns of high volatility and over-reliance on ETF inflows; a reversal in funding conditions could quickly trigger downside pressure.

In summary, Citi’s report signals that ETH is no longer just Bitcoin’s “shadow” but is gradually moving toward the market’s center.

Can Ethereum sustainably challenge Bitcoin’s dominance? It remains to be seen, but institutional capital and on-chain fundamentals are giving ETH more confidence.