Bitcoin favored over ether among traders in thin liquidity

Bitcoin’s appeal is driven by its reputation as ‘digital gold’ and the growing excitement over possible spot bitcoin ETFs, according to one analyst

article-image

Wolfgang Golob/Shutterstock, modified by Blockworks

share

As bitcoin (BTC) solidifies its dominance over its main rival ether (ETH), traders are showing a clear preference, despite the crypto market witnessing its most prolonged liquidity crisis in years. 

Data from market intelligence firms Glassnode and K33 show the crisis, echoing patterns seen during the 2014-15 and 2018-19 bear markets, has persisted for over 535 days. 

One significant date for market observers is on Friday when the US Securities and Exchange Commission is poised to make its decision to appeal the recent Grayscale court ruling linked to its spot BTC ETF application. 

An absence of an SEC appeal could spark a market reaction, though its longevity remains in question, K33 said in a recent note

Bitcoin’s continued appeal seems rooted in its role as “digital gold” in risk-averse scenarios and rising anticipation surrounding the potential rollout of spot bitcoin ETFs, the market intelligence firm added.

Elsewhere, derivatives markets are revealing subtle shifts. 

CME’s next month premium and BTC perpetuals’ offshore funding rates have both seen an uptick, suggesting cautious optimism, K33 alluded.

However, with offshore funding rates still lingering below the neutral mark and continued outflows from BTC ETFs, the market, despite its optimism, seems hesitant to expect further price rises, K33 said.

Even as ether trails behind, bitcoin’s steadfast position as traders’ preferred digital asset highlights its impressive year-long trajectory, boasting a rise of over 63% this year. The world’s second-largest digital asset, meanwhile, is up just half that amount at 30% to $1,560, Blockworks data shows.

Analysis points to the Realized Cap data — which underscores the dormant nature of coins transferred on-chain — suggesting very few coins transferred on-chain are being used to take profit or minimize losses, Glassnode said in a blog post on Monday.

“Liquidity continues to dry up across the digital assets as network settlement, Exchange interaction and capital flows reside at cycle lows, heavily underscoring the current acute apathy experienced by the market,” it said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Robinhood announced that it’s building an L2 and also plans to launch staking for US users

article-image

“We’re not really doing anything controversial,” said co-founder Zak Folkman at Permissionless last week

article-image

Why equities are more stable than in past decades, plus advice from Peter Lynch

article-image

As Permissionless speakers talk on-chain RWA potential, tokenized stock platform Dinari secures FINRA broker-dealer approval

article-image

JavaScript fueled a toxic ad model for the internet, says Brendan Eich, but crypto and privacy tech could help us escape it

article-image

Stablecoin drivers, the SEC’s war on ETH, and how AI is driving crypto