By Nancy, PANews

With the price approaching its all-time high and the ETH/BTC exchange rate rebounding sharply, bullish sentiment on Ethereum is at an all-time high. However, Bitcoin maximalist Samson Mow has poured cold water on this sentiment, arguing that this rally isn't a validation of Ethereum's long-term value, but rather a short-term capital speculation aimed at acquiring more BTC. The current capital-driven Ethereum boom is also facing a divided market, with institutions driving large-scale buying and short-term investors accelerating profit-taking.

Is Ethereum's rise just to gain more BTC? Bitcoin believers question its value

In recent months, Ethereum has experienced a sustained and explosive rise, with its price approaching a record high. Market sentiment has been ignited, and Ethereum's target price has been continuously raised. However, Samson Mow, a staunch Bitcoin supporter, has voiced a different view.

A few days ago, Mow posted on social media that most ETH holders also own a large amount of BTC, including ICO participants and insiders. They are converting these BTC into ETH and using new narratives such as the Ethereum Treasury to push up the price of ETH. Once they push the price to a high enough level, they will sell ETH, creating a new generation of "buyers" and then exchange the proceeds back for BTC.

Mow further stated that it will be difficult for ETH to break new all-time highs because the closer it gets to a psychological barrier, the stronger the incentive to sell. This situation is similar to a prisoner's dilemma, but with only the choice between selling and holding. In the long run, no one truly wants ETH. Bitcoin holders need not worry about ETH/BTC breaking through the downward trend line. Ethereum has always been a tool for acquiring more Bitcoin, both in the ICO era and today.

Mow also pointedly quoted Ethereum founder Vitalik Buterin, exposing his "double standard" on treasury issues. Vitalik has criticized Bitcoin Finance, saying it "defies the original purpose of cryptocurrency," yet has described similar trends within the Ethereum ecosystem as "beneficial and valuable." This inconsistent stance further raises Mow's doubts about the long-term value of ETH.

Mow's faith in Bitcoin is almost religious. He once predicted that the price of Bitcoin would reach $1 million, attributing this to its scarcity, institutional adoption, the growth of corporate and national reserves, and the unsustainability of the fiat monetary system. In his view, "all factors that are unfavorable to Bitcoin are converging to zero."

This Bitcoin OG actually began his Bitcoin career as early as 2015, joining Bitcoin exchange and mining pool BTCC and Bitcoin infrastructure development company Blockstream. In 2021, he founded JAN3, dedicated to accelerating Bitcoin's global adoption. Furthermore, he has discussed Bitcoin mining and its potential as a legal tender with multiple countries, and was even a key driver of Bitcoin legal tender in El Salvador.

Institutional funds have become a fanatical driving force, and the market turnover period has accelerated

Although Ethereum has been "bombarded" by Bitcoin believers, its market performance has improved significantly due to the entry of institutional funds.

The ETH/BTC ratio is a key indicator of Ethereum's price performance relative to Bitcoin. Since falling below 0.02 in April, a five-year low, the ETH/BTC ratio has now risen to 0.039, almost returning to its mid-2021 level. Price performance has also been impressive. Coinglass data shows that while Bitcoin saw gains of 29.74% and 11% in Q2 and Q3 of this year, respectively, Ethereum has far outpaced BTC, with gains of 36.48% and 86.12%, respectively, significantly outperforming BTC.

Institutional investment is the absolute main force behind Ethereum's rise. Data shows that Ethereum spot ETFs are attracting funds at an astonishing rate, with net inflows exceeding $2.91 billion in a single week, and at one point exceeding $1 billion in daily inflows, surpassing the $560 million in Bitcoin spot ETFs. Meanwhile, according to Ethereum supporter Anthony Sassano, the net issuance of ETH over the past 30 days was 74,000, while fund companies and ETFs have collectively purchased 3.5 million ETH, 47 times the net issuance during the same period.

Clearly, the fundamentals behind this round of Ethereum's rise have changed. In fact, compared to the on-chain frenzy in 2021, driven by DeFi and NFT narratives, on-chain demand in this cycle has been relatively flat. Taking the change in address count as an example, Etherscan data shows that the number of Ethereum unique addresses has only increased by 3.1% over the past two months.

This powerful funding effect directly ignited market sentiment. Standard Chartered Bank raised its year-end target price for ETH to $7,500. BitMine Chairman Tom Lee even boldly predicted that it would reach the $10,000-$15,000 range by the end of the year. Placeholder VC Partner Chris Burniske believes it could reach $6,900-$8,000 by October.

As institutional investors drive up Ethereum prices and allow more holders to profit, the market is accelerating into a turnover phase. Glassnode data shows that 98% of Ethereum's supply is profitable, reaching a two-year high. ETH profit realization (calculated based on the 7-day moving average) reached a high of $771 million per day in July, the highest level since December 2024. It has now fallen back to $553 million per day, with long-term holders realizing profits at levels similar to December 2024, while short-term investors are realizing even greater gains.

The movements of whales are particularly striking. According to Twitter user @Murphychen888 , citing Glassnode data from August 14th, addresses holding over 10,000 ETH realized a single-day profit of $1.4 billion, the largest whale cash-out in nearly two years. Meanwhile, the cash-out volume of chips with profit margins exceeding 100% also hit a two-year high. However, "older" coins with profit margins exceeding 300% are not yet overly sensitive to current prices, and there has not been the large-scale cash-out seen in March and June of last year. Only the volume of selling is gradually increasing. This also suggests that during this wave of ETH's rise, a large number of whales holding short- and medium-term positions have chosen to exit at high levels to secure profits.

Ethereum staking behavior is also showing divergent trends. Data from validatorqueue shows that as of August 15th, over 785,000 ETH had been withdrawn from the Ethereum network, valued at approximately $3.6 billion. This represents a record withdrawal for Coinbase, while approximately 341,000 ETH remain waiting to join the network. This reflects the fact that some stakers are cashing in after the price rebounded over 160% from its April low. Meanwhile, new funds are entering the market, driven by favorable regulations and institutional demand. Publicly listed companies such as SharpLink Gaming and BitMine Immersion have recently significantly increased their ETH holdings and staking.

Overall, this round of Ethereum's rise was mainly driven by institutional liquidity. Although short-term prices and sentiment formed a positive feedback, the on-chain activity and user demand increased only slightly, and long-term market confidence was difficult to support. Therefore, short-term turnover game was also intensifying.