Institutional capital flows have officially reversed. During July 2026, spot Ethereum ETFs attracted a net $365 million, marking their highest monthly record. In the same month, spot Bitcoin ETFs only managed to bring in $205 million - their worst-ever inflow figure. This marks the first time Ethereum has surpassed Bitcoin in the competition to attract fresh institutional capital.
This shift in interest was also clearly visible on public exchanges. Throughout July, the ETH/BTC ratio on Binance rose by 11%, climbing from 0.027 to 0.030.
Selling Pressure from Established Players
Bitcoin remains stuck in a deep downward cycle. After reaching a price level of $126,080 in October 2025, its value plummeted to below $60,000 in May 2026 - a correction of more than 50%.
This downtrend has forced large holders to reduce risk. Strategy, an investment entity formerly known as MicroStrategy, began selling their Bitcoin holdings in July 2026. The company offloaded assets worth $218 million over four consecutive weeks. This maneuver was executed while they were carrying unrealized losses reaching $8.2 billion.
Macroeconomic conditions have also placed an additional burden on Bitcoin. The United States central bank kept interest rates in the range of 4.25%-4.5% throughout the first half of 2026. These high interest rates increased the opportunity cost for asset managers. They chose to hold back new capital inflows into Bitcoin because the asset does not offer passive yields, while other instruments offer competitive interest rates.
Staking Yields Change the Game
Institutions are now evaluating Ethereum with different metrics. The investment narrative is shifting from a mere digital gold claim to a transaction settlement network that regularly generates yield.
Regulatory clarity emerged when the SEC and CFTC published joint interpretive guidance on March 17, 2026. The two market regulators finally determined that staking yields are not classified as securities.
BlackRock immediately capitalized on this legal certainty by launching the iShares Staked Ethereum Trust ETF (ETHB) in the same month. The product offers a gross staking yield of 3.1% to 3.3%. After deducting various management fees, unit holders still pocket a net yield of between 1.9% and 2.6%.
To manage these funds, BlackRock set a fee of 0.25%, which is discounted to 0.12% in the first year. Working with Coinbase as the custodian, the company also takes an 18% cut of this staking income. This business certainty immediately triggered competition; Fidelity and Franklin Templeton are currently in the regulatory queue to release similar staking ETFs.
This rotation of hundreds of millions of dollars is not just a story about Ethereum winning monthly sentiment. This event shows that institutions are starting to apply traditional financial criteria to the crypto market - prioritizing yield-bearing assets when price growth slows. For retail investors who still faithfully hold Bitcoin, this is a clear warning that mathematical calculations always win against emotional loyalty at the Wall Street money table.
Reported from crypto.news.
Read also: How Crypto Staking Works and Its Risks
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
