Ethereum Ethereum$3,973.03 Emerging as front-runner for crypto recovery in Q3, pulling away from Bitcoin BTC$106,931.06 A report from CoinCecko found that the lag is due to an influx of funds into altcoins, DeFi protocols, and a new wave of tokenized assets.
The broader market is worth more than $5 trillion and has experienced two consecutive quarters of strong growth, but this time Bitcoin is not in the driver’s seat. Investors turned to Ethereum instead. Ethereum$3,973.03 A report from CoinCecko found that other large tokens could further advance the momentum.
In early July, it looked like Bitcoin would set the pace again. Its price hit a new high early in the quarter, supported by interest from retail investors and inflows from institutional investors through spot exchange-traded funds (ETFs).
But by September, the story had changed. While Bitcoin cooled, Ether caught fire.
A combination of demand for ETFs, increased interest in tokenized real-world assets, and renewed attention from corporate treasuries sent ETH to new highs, then subsided.
CoinGecko analysts wrote that this change in focus was one of the defining trends of the quarter.
Trading activity regained momentum after declining for two consecutive quarters. Spot trading volumes surged across centralized and decentralized exchanges. But this story wasn’t just about volume, it was about where that volume was going.
Meme coins, long considered fringe, have made a dramatic comeback with tokens like M climbing the charts. Stablecoins like USDe have risen to prominence, and lesser-known altcoins have entered the top 30 by market capitalization. According to the report, DeFi, which had faded from the spotlight at the end of 2024, has made a comeback as the total amount locked in lending and staking protocols rose with the rise of Ethereum.
Changes in investor appetite
Behind the scenes, structural changes were taking shape.
Bitcoin’s share of the overall cryptocurrency market has declined, indicating that investors’ attention has shifted to other narratives. Ethereum has risen, but so have categories that have struggled to break through in previous years, especially tokenized assets.
A new generation of on-chain stocks and bonds is starting to take root, and protocols like Ondo and Backed Finance have gained traction among investors looking for a bridge to traditional decentralized finance.
Bitcoin has also become less connected to traditional markets. Its price movement has decoupled from the S&P 500 for the first time in more than a year. This can be seen as a positive and is evidence that cryptocurrencies are becoming a more independent asset class, the report said. But it also reflects how fragmented investor interests are, the report said.
The mining sector also reflects this changing dynamic. Bitcoin’s hashrate hit an all-time high, and miner-focused ETFs posted strong returns.
However, the report found that the focus was elsewhere: on emerging tokens, the momentum of Ethereum, and the resurgence of DeFi.
