The "pivot" stories from Bitcoin to Ethereum are misleading you

Every few weeks, crypto news aggregator sites make sensational headlines about capital “rotation” from Bitcoin to Ethereum. A whale swaps 200 million USD on THORChain, ETF inflows into Ethereum increase for three consecutive days, or a cross-chain bridge records the highest weekly trading volume since 2021.

Immediately, the familiar story is spun: institutional money is shifting to higher risk levels, an altcoin season is approaching, and Bitcoin dominance has peaked.

But most of these stories collapse within 72 hours. The “whale” on THORChain turns out to be just an address rebalancing its portfolio over three weeks—a figure too small compared to Ethereum’s daily spot volume of over 8 billion USD on centralized exchanges.

ETF capital flows quickly reverse when Bitcoin products attract twice the capital in the following week. Volume spikes on bridges often originate from hacks or airdrop hunts, not from a systematic portfolio rebalancing by a manager in Connecticut or the US.

The issue isn’t that capital never shifts. August 2025 is a classic example. But headlines that scream in December are not. The difference lies in understanding where the capital is going, how much, and whether derivatives markets confirm or deny that thesis.

Where the activity occurs that determines its significance

Not all liquidity points carry the same weight. The spot and derivatives markets on centralized exchanges like Binance, Coinbase, OKX, or Deribit are where price discovery and economic completion happen for both institutional and retail flows.

When the proportion of ETH volume in total BTC+ETH volume on these platforms rises from 40% to 56% and stays there for weeks, as Kaiko data shows in August, it can be considered a structural demand.

Deeper order books, divergent funding rates, options trading that adjusts positions—these are markets involving thousands of real participants, bound by margin and legal regulations.

The weekly trading volume of Ethereum was equal to Bitcoin’s by the end of 2025 after years of Bitcoin maintaining a stable lead on major centralized exchanges. Image: Kaiko Conversely, on-chain platforms like THORChain send a completely different signal.

THORChain allows direct swaps between Bitcoin and Ethereum via liquidity pools, without wrapped tokens or custodial custody, making it the “cleanest” channel to observe genuine cross-chain transactions.

However, “clean” does not mean “representative.” The total protocol volume on THORChain usually hovers around a few hundred million USD daily. Even the record in February 2025 with over 859 million USD in a single day, or over 1 billion USD in 48 hours, mainly stems from forced liquidations related to the Bybit hack, not from systematic portfolio rotation.

Trading intent in a THORChain transaction can be observed, but the market cannot infer a regime change unless centralized markets also move simultaneously.

The whale cluster in December is a typical example. From November 25 to December 15, one or several addresses swapped about 2,289 BTC for 67,253 ETH via THORChain, totaling over 200 million USD.

CoinMarketCap calls this “whale-led capital rotation.” But 200 million USD spread over 20 days is only about 2.5% of Ethereum’s daily spot volume on centralized exchanges at that time.

If Binance, Coinbase, and OKX do not show Ethereum consistently gaining market share from Bitcoin, and if ETH ETF flows do not diverge significantly from BTC, the most accurate description remains “a few large wallets rebalancing their portfolios via THORChain.”

Thin bridges, isolated DEX pools, or independent cross-chain explorers are even lower in the signal hierarchy.

A volume spike on Stargate Finance or a pool on Curve showing net ETH flow may merely reflect arbitrage, airdrop hunting, or a fund unwinding basis trades. These venues lack depth, participant diversity, and compliance costs—factors that make market manipulation difficult. Consider them as informational references, not proof.

Absolute figures without context are meaningless

Raw dollar figures can easily deceive journalists and traders alike. “145 million USD swapped from Bitcoin to Ethereum” sounds decisive, but decisive compared to what?

In August 2025, when the rotation truly occurs, Ethereum records about 480 trillion USD in spot volume on exchanges, compared to 401 trillion USD for Bitcoin.

According to VanEck, over 4 billion USD flows into Ethereum ETF products, while Bitcoin experiences outflows of about 600 million USD. This scale is much larger than any on-chain bridge headline, and more importantly, it lasts for weeks, not hours.

From this data, a practical threshold for spot market “rotation” can be derived: it should be called a rotation only when ETH’s market share in the total BTC+ETH volume on top-tier centralized exchanges increases by at least 10–15% over a 30-day average and sustains for a full trading week.

Anything less, like “ETH temporarily had higher volume than BTC yesterday on one exchange,” is just noise.

Kaiko’s August data shows Ethereum accounts for over 56% of total BTC+ETH spot volume on major exchanges, with a market depth of 1% around 208 million USD, nearly double the April lows.

Ethereum’s share of total BTC-ETH trading volume exceeded 50% by the end of 2025, reaching the highest level since 2021. Image: Kaiko That is the true definition of “large enough” in the spot market.

For exchange-traded products, the threshold is even higher. CoinShares’ weekly fund flow report on October 20 recorded 946 million USD outflows from Bitcoin products and 205 million USD inflows into Ethereum—clear divergence.

However, considering the record global crypto ETF inflow of 5.95 billion USD in early October, with 3.55 billion USD into Bitcoin and 1.48 billion USD into Ethereum, both assets increased together, with no rotation.

July was similar: about 6.3 billion USD into BTC ETFs and 5.5 billion USD into ETH ETFs. This reflects overall risk appetite, not capital shifting from one asset to another.

Only when net inflows of one side reach billions of USD, while the other experiences outflows or near-zero flows for a month, does the concept of “rotation” truly have meaning.

Rotation needs confirmation from derivatives markets

Spot trading alone is never enough to confirm a rotation, as it can reverse within a single session. ETF flows take days or weeks to reflect, creating a gap that can be exploited for hype.

Derivatives markets are the real testing ground over time.

If capital is genuinely moving from Bitcoin to Ethereum, options traders will price in ETH upside, perpetual funding rates will diverge, and open interest will shift. If these do not happen, spot volatility is just noise.

The ETH/BTC exchange rate is the clearest indicator. In May and August 2025, ETH/BTC rose 25–30% over several weeks, with Ethereum’s actual volatility surging close to 90%, while short-term implied volatility increased by about 20 points, and Bitcoin’s volatility eased.

Amber Group’s weekly report on August 11 noted Ethereum surpassing 4,000 USD, ETH/BTC rising above 0.035—its highest in the year—with option skew heavily favoring calls, while Bitcoin skew remained neutral and realized volatility decreased.

Funding and open interest on perpetual contracts further reinforce the trend.

Kaiko reports that as Ethereum approached its all-time high in August, ETH perpetual contracts on Binance hit record levels in both ETH quantity and USD value, while ETH spot volume averaged over 8 billion USD daily.

Capital inflows into ETH spot products also reached new highs. When spot, perpetual, and exchange-traded products align, and options data confirms, the picture becomes consistent: capital is shifting to higher-risk levels from Bitcoin to Ethereum.

In contrast, December 2025 does not meet any of these criteria. CoinShares reports both Bitcoin and Ethereum experiencing inflows in the first week of December, about 461 million USD into BTC and 308 million USD into ETH, after a month of heavy outflows.

No reports from Deribit or Kaiko show sustained shifts in ETH options skew or funding rates relative to Bitcoin coinciding with THORChain whale activity.

The derivatives space does not confirm the on-chain story.

Signal or noise

August 2025 surpasses all criteria. Ethereum breaks its 2021 peak near 5,000 USD, outperforming Bitcoin in price, and accounts for over 56% of spot BTC+ETH volume on major exchanges with superior market depth.

Aggregated estimates show Ethereum reaching about 480 trillion USD in spot volume for the month, compared to 401 trillion USD for Bitcoin—its first reversal after seven years.

ETH exchange-traded products attracted over 4 billion USD, while Bitcoin experienced outflows of about 600 million USD, reducing Bitcoin dominance from 65% to 57%.

Ethereum’s perpetual funding rates spiked above 0.03% in early August 2025, indicating traders paid premiums to maintain long positions. Image: Deribit Deribit recorded a 17% increase in ETH over a week, with implied futures yields around 9.7%, ETH perpetual funding rates higher than BTC, and risk reversals showing a clear call premium, while Bitcoin remained neutral with decreasing realized volatility.

Multi-market, multi-channel, sustained, cross-confirmed—this is real rotation with evidence.

December 2025, however, does not. One or several addresses swapped about 2,300 BTC for 67,000 ETH via THORChain over roughly 20 days.

This scale is too small compared to Ethereum’s average daily spot volume of 8 billion USD or the 480 trillion USD figure for August.

ETF flows are not divergent, derivatives do not confirm. The THORChain activity in December is just noise: large transactions on a single cross-chain platform, not validated capital rotation from Bitcoin to Ethereum.