Ethereum is outperforming Bitcoin when it shouldn’t be — what’s driving it?
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Ethereum is outpacing Bitcoin as tensions involving the United States, Israel, and Iran continue to shape global markets.
Data from CryptoSlate shows ETH has risen 18% against the dollar since the start of March, compared with a 13% gain for Bitcoin over the same period.
The ETH/BTC ratio has also moved higher, rising 7.6% to 0.0315 from 0.0293 in less than three weeks, a sign that Ethereum is gaining ground relative to Bitcoin rather than simply rising alongside it.
That shift has pushed ETH above $2,300 and left it on track for its first positive monthly close since August 2025. The move stands out because it is unfolding amid pressure across global macro markets, where conflict risk and higher energy prices have begun to reshape expectations for inflation and monetary policy.
The military conflict involving the United States, Israel, and Iran has driven Brent crude above $102 a barrel, while West Texas Intermediate has moved past $95. Energy markets are increasingly pricing in the risk of disruption in the Strait of Hormuz, a shipping route that carries about one-fifth of global oil and liquefied natural gas flows.
Higher oil prices have often fed into inflation expectations, raising the prospect that central banks will keep policy tight for longer. In past episodes, that backdrop has tended to support Bitcoin’s role as a defensive crypto trade, with investors treating it as the asset closest to a macro hedge inside the sector.
This time, Ethereum is delivering a stronger performance. The divergence points to capital flowing into blockchain-specific themes tied to Ethereum’s market structure, network activity, and positioning among institutional investors, rather than a broad move into crypto as a shelter from geopolitical stress.
Asset management firm Matrxiport said:
“Ethereum is increasingly behaving like a financial asset…This dynamic may also help explain why crypto has recently shown relative strength versus other asset classes and does not neatly fit into the traditional risk-on/risk-off framework.”
Wall Street money returns to Ethereum
Wall Street is sending fresh capital into Ethereum at a pace that is helping drive the token’s recent outperformance.
Data from SoSoValue shows the nine spot ETH exchange-traded funds (ETFs) took in more than $160 million of net inflows last week, their strongest weekly intake since mid-January. The trend extended into the new week, with the funds drawing another $35.9 million on March 16.
That flow pattern has added to the case that institutional demand is returning to ETH after a period of weaker sentiment.
Typically, sustained inflows of that scale have previously preceded some of the asset’s sharper price moves, including rallies that carried ETH above $4,000.
So, the latest allocations suggest portfolio managers are again increasing exposure as the market broadens beyond Bitcoin.
Meanwhile, a second shift is also shaping the investment case. Regulated products that offer exposure to Ethereum’s network yield are opening a new route for traditional finance investors.
BlackRock recently launched an Ethereum staking ETF under the ticker ETHB, giving investors access to both price exposure and validator rewards. The fund raised $104.7 million in seed capital and attracted more than $45.7 million of additional inflows in its first two trading days.
That structure gives portfolio managers a way to evaluate ETH through cash flow potential and network-based yield, a framework that can carry more weight with allocators who need income generation as part of the case for holding alternative assets.
At the same time, corporate buyers are building Ethereum positions on their balance sheets.
Since last year, BitMine has aggressively expanded its ETH treasury and said it plans to acquire up to 5% of the token’s supply.
The pace of those purchases has increased this month, with the company buying more than 100,000 ETH in the first two weeks, bringing total corporate holdings to nearly 4.6 million Ether as of mid-March.
That buying is creating a steady layer of demand that echoes the treasury strategy several public companies used to accumulate Bitcoin earlier in the cycle.
Speculative interest gradually returns to ETH
Speculative demand is showing signs of returning to ETH as institutional buying strengthens.
CryptoQuant data showed that derivatives positioning across the digital-asset market was reset after the Oct. 10 flash crash, when about $19 billion in leveraged positions were liquidated over 24 hours.
On Binance, Ethereum’s estimated leverage ratio fell 27% in the aftermath of that move, pointing to a broad reduction in speculative exposure.
Since then, leverage has been rebuilding gradually. By mid-March, positioning had risen alongside an improvement in trader sentiment, indicating that speculative participation was returning in a more measured way than during earlier phases of the cycle.
Data from BlockScholes adds to that picture. The firm’s ETH Risk-Appetite Index has climbed from earlier lows, signaling a pickup in investors’ willingness to take exposure to the token as conditions across the crypto market stabilize.
Meanwhile, market structure data also points to lower immediate selling pressure on the digital asset.
CryptoQuant data shows that 30-day Ethereum inflows to Binance fell to about $20.2 billion, the lowest level since May 2025. The drop in exchange deposits suggests fewer tokens are being positioned for sale on major centralized venues, thereby tightening liquidity as prices recover.
At the same time, more investors appear to be moving ETH into private wallets and staking contracts. That shift reduces the volume of tokens readily available for spot trading and leaves the market more responsive to fresh buying activity.
Ethereum's blockchain fundamentals also support a rally
Ethereum’s recent gains against Bitcoin are tracking a pickup in network activity, according to data from staking provider Everstake and other industry sources.
In a recent report, Everstake said Ethereum is on pace to post its strongest quarter of network usage in more than a year, even before the first quarter is complete.
The network has processed more than 150 million transactions so far in the period and recorded 27.7 million active addresses, the report said. Both figures are above comparable quarterly readings seen across 2025.
The increase in activity is also showing up in Ethereum’s base-layer throughput. Everstake said the network reached a record 2.52 million gas per second, a metric indicating higher usage across decentralized applications and other on-chain activity.
Part of that demand is tied to Ethereum’s position in tokenized real-world assets, a segment that has drawn more attention from financial firms.
Data from Token Terminal shows Ethereum currently settles about $200 billion in tokenized financial instruments, giving it a 61% share of the market. That scale has helped keep Ethereum at the center of issuance and settlement activity as institutions move traditional assets onto blockchain-based rails.
The network’s supply profile is also part of the investment case. Since Ethereum moved to a proof-of-stake system, the pace of new ether issuance has remained below that of Bitcoin, according to Leon Waidmann, head of research at Lisk.
Waidmann said Ethereum’s annualized supply growth is about 0.24%, compared with about 1.28% for Bitcoin after its latest halving.
Considering this, he said:
“Everyone calls Bitcoin ‘sound money.' But by the numbers, ETH has the tighter monetary policy!”
Taken together, the data points to a market where Ethereum’s price strength is being matched by higher usage, broader participation, and a slower rate of supply growth. For investors weighing relative value across major digital assets, that combination is helping support ETH's recent outperformance.
The post Ethereum is outperforming Bitcoin when it shouldn’t be — what’s driving it? appeared first on CryptoSlate.
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