ETH Liquidity Check: Is it Catching Up with Bitcoin?
1Kelly Ye and Helena Lam of Avenir Group explore how liquidity indicators could reveal underlying capital flows and liquidity conditions for ether, and how there may still be ample room for expansion as institutional interest accelerates.
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In our previous research report titled Bitcoin’s Liquidity Trifecta: Unpacking Liquidity Across On-Chain Data, Market Microstructure and Macro Drivers, we explored how various liquidity indicators could reveal underlying capital flows and liquidity conditions for bitcoin. Applying that same framework to ether (ETH) gives us valuable insight into its current liquidity profile — both on-chain and in the broader market. In this update, we also highlight the growing role of digital asset treasuries (DATs) which have emerged as a key driver behind ETH’s recent rally.
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Realized cap tracks the net USD-denominated capital invested in a token, reflecting the cumulative cost basis of all holders. Since the cycle low in November 2022, ETH has absorbed over $81 billion in fresh capital inflows, pushing its realized cap to a new all-time high of $266 billion as of August 8th, 2025.
For context, this represents a 43% increase for ETH over the period — substantial, but still well below bitcoin’s 136% rise in realized cap. The slower growth rate suggests that while ETH has been attracting meaningful new investment, there may still be ample room for expansion as institutional interest accelerates.
In our bitcoin study, we developed a method to estimate genuine institutional demand by isolating ETF inflows not tied to hedged arbitrage trades. Applying this framework to ETH shows that 80–90% of spot ETH ETF inflows are likely genuine institutional allocations, with the remainder driven by arbitrage strategies — long spot positions hedged via CME futures to capture price differentials.
Interestingly, the proportion of arbitrage-related flows is much higher for ETH than bitcoin, where only around 3% of spot ether ETF inflows are estimated to be arbitrage-based. This highlights that institutional allocation to ETH still lags behind BTC, though we expect this gap to close gradually with the recent influx of institutional interest in the cryptocurrency.
Data source: Avenir, CFTC, Glassnode
As of July 21st, combined open interest (OI) in ETH futures and options stood at $71 billion. However, unlike bitcoin — where OI in perpetual futures and options is nearly balanced — ETH options OI remains less than half of perpetual futures OI.
Given that options are more often used by professional traders and institutions, this imbalance indicates that institutional derivatives participation in...
https://www.coindesk.com/coindesk-indices/2025/08/27/eth-liquidity-check-is-it-catching-up-with-bitcoin
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