Bitcoin has decisively outperformed both mid-cap altcoins and its closest peer, Ethereum, over the past two years. According to new research from blockchain analytics firm Glassnode and crypto exchange Bybit, Bitcoin rose 28% in value, while the median mid-cap altcoin declined by 74%. Ethereum remained roughly flat during this period.
Strong Bitcoin leadership contrasts with historical altcoin cycles
Analysts at Glassnode and Bybit highlighted that recent performance marks a sharp departure from the typical “altseason” rotation, in which rising Bitcoin prices are commonly followed by capital flow into smaller tokens. Instead, gains have been heavily concentrated in Bitcoin, with mid-cap assets facing steep losses.
The report described the trend as Bitcoin compounding returns steadily while most mid-caps experienced repeated declines, further widening the gap between the leading cryptocurrency and the broader market.
Bitcoin has continued to outperform, while the median mid-cap altcoin has lost significant value, indicating that the traditional capital rotation into smaller tokens has not materialized in this cycle.
Ethereum, the second-largest cryptocurrency by market cap, saw little overall change, emphasizing how tightly gains remained focused at the very top. Observers noted that this diverges from previous cycles where Ethereum and other major altcoins also participated in lasting rallies.
Leverage and market risk shift to smaller coins
The research also examined trends in market leverage, finding that speculative risk had accumulated in smaller coins rather than in Bitcoin itself. Futures open interest represented about 2% of Bitcoin’s market capitalization, compared with approximately 24% for PEPE, a prominent memecoin.
This pattern suggests that while Bitcoin’s price growth has been driven largely by spot demand, aggressive leverage has migrated to riskier, less established tokens.
Mini dictionary: PEPE is a memecoin launched in 2023, inspired by internet culture, and known for attracting speculative trading activity due to its high volatility and community-driven narrative.
| Asset | Futures Open Interest (% of Market Cap) |
|---|---|
| Bitcoin | 2% |
| PEPE | 24% |
ETF flows and market breadth
Institutional investment has also remained heavily focused on Bitcoin. Spot Bitcoin ETFs have attracted about $55.2 billion in net inflows, far surpassing Ethereum funds, which recorded approximately $13.1 billion in inflows while recently experiencing a streak of outflows.
Solana, a blockchain platform known for its high throughput, has seen spot ETF inflows totaling $29.7 million, which is comparatively small, reflecting its more recent introduction to the ETF landscape.
| Asset | ETF Net Inflows |
|---|---|
| Bitcoin | $55.2 billion |
| Ethereum | $13.1 billion |
| Solana | $29.7 million |
Earlier this week, Bitcoin briefly rallied above $80,000 after a dovish Federal Reserve outlook, sparking a rebound across digital assets. The total crypto market capitalization rose 4.6% in a day, reaching approximately $2.85 trillion. While several major cryptocurrencies, including Solana, NEAR, and Uniswap, outpaced Bitcoin during this bounce with double-digit daily gains, broad participation across the market has been absent for much of the year.
Net inflows remain concentrated in Bitcoin funds, with ETF data underscoring mainstream investor preference for the top cryptocurrency.
The Glassnode and Bybit report is based on data through the close of August 23 and focuses on selected trading venues tracked by Glassnode, potentially omitting information from other platforms.
