Bitcoin Retreats in August, Reversing Summer Momentum; September Could Be Pivotal

Bitcoin Loses Summer Gains as Ether Draws Institutional Capital

August proved challenging for bitcoin (BTC), which fell roughly 8% over the month, erasing much of its summer rally. The cryptocurrency dropped from a mid-August peak above $124,000 to just over $108,000, now slightly below its Memorial Day level of $109,500.

Ether (ETH), by contrast, outperformed significantly, rising 14% in August. Institutional inflows into ETH treasury firms and spot ETFs fueled the rally. According to Bloomberg, ETH ETFs received $4 billion through August 28, compared to $629 million for BTC ETFs. Given ether’s market cap of $500 billion — about one-quarter of bitcoin’s $2.1 trillion — the relative impact of these inflows was substantial.

The divergence highlights the finite pool of capital available for crypto. In August, ether captured the lion’s share of new investment, while bitcoin faced broader market pressure despite strong ETF inflows and a supportive macro backdrop, including Federal Reserve dovish signals.

Historically, September has also been a weaker month for BTC. Glassnode data shows declines in eight of the past twelve Septembers, with an average loss of 3.8%. However, the limited sample size and evolving market maturity suggest that historical seasonality should be considered cautiously.

Bottom Line: August’s volatility underscores the competitive flow of capital within crypto. Ether emerged as the primary beneficiary, while bitcoin faces potential seasonal headwinds, though macro factors and ETF inflows could support stability.