Ethereum (ETH) has been setting the tone in the crypto market lately. Last week, the second largest crypto by market cap surged over 26% taking away the spotlight from Bitcoin (BTC). On the monthly timeframe, the altcoin is parasailing with over 50% price surge driven by strong institutional inflows yield-hunting behavior, and political tailwinds. 

In an exclusive comment shared to Blockchain News, Javier Rodriguez-Alarcón – the Chief Investment Officer at XBTO and a former executive at BlackRock and JPMorgan – believes that the crypto market has entered a new phase where Ethereum, and not Bitcoin, is setting the pace. 

ETH is “Having Its Moment”; Javier Rodriguez States

The past week marked a sharp divergence in the performance of leading cryptocurrencies. Ethereum climbed +26.43% as the price topped to the north of $3,800. This rally pushed the altcoin’s monthly gains above +51% and its year-to-date return to +12.75%. Meanwhile, Bitcoin dropped by 1.55%, a move that trimmed its monthly and yearly gains to 9.49% and 25.48%, respectively. 

Javier Rodriguez correlates Ethereum’s price rally to the signing of the GENIUS Act into law by US President Donald Trump. This bill passed the House of Representatives on July 17 after scooping 308 votes in favor, out of 430 total votes. 

“Ethereum is “having its moment” following President Trump’s signing of the GENIUS Act, which legalizes fully-backed stablecoins and cements ETH’s role as their primary settlement rail,” Javier wrote. 

The XBTO CIO further noted that the performance gap between Ethereum and Bitcoin reflects a shift in capital preference. In short, investors have been rotating from Bitcoin into ETH as well as some select altcoins. 

“Capital has been attractive away from BTC and into Ethereum, as well as into select higher-beta assets, underscoring a shift in both positioning and sentiment,” he said. 

This repositioning was clearly seen in altcoins including Solana and XRP, which rallied alongside Ethereum while BTC remained range-bound around $118,000. Even smaller altcoins like SPX6900 rallied to new highs, a move that has since sparked a debate around an incoming alt season. 

This is what a 3-year Cup & Handle looks like on the altcoin chart…
It’s textbook. It’s massive. And it’s knocking on the door right now.

Break above $1.54T and…
🚀 Altcoin Season may go full throttle.

Watch it closely. Save this chart! pic.twitter.com/aQgEWH6NYr

— Crypto Crew University (@CryptoCrewU) July 23, 2025

Risk Appetite Returns but Remains Selective

According to Javier Rodriguez, the crypto market is facing selective risk appetite as investors target higher-volatility assets, particularly those tied to momentum plays or short-term thematic rotations. This was highlighted by a surge in risk indicators. 

“Risk appetite is reawakening after months of defensive posturing. The Market Factor rose +15.18% last week, while the Beta Factor gained +5.95%, strong signals that investors are stepping back into higher-volatility areas of the market,” Javier noted. 

But still, not all corners of the market are benefiting as indicated by the plunging Momentum Factor and Size Factor. Javier Rodriguez stated: 

“The Momentum Factor fell -0.95%, and the Size Factor dropped -0.64%, indicating that smaller assets and trend-following strategies aren’t participating.”

In simpler terms, capital is flowing into Ethereum as well as some select big name altcoins. This selective flow of capital into ETH and a few large names is creating a top-heavy structure. Staking and treasury involvement continue to expand ETH’s base, but without broader participation, any dip in liquidity could trigger volatility. ETF rebalancing is also adding the fuel, yet it might distort market signals if taken at face value. 

TradFi Advances and a Blurring Line

Earlier this week, JPMorgan announced that it is exploring crypto-backed lending. This move may prove to be one of the most consequential developments of the quarter. For years, the conversation focused on ETFs but now, institutions are evaluating lending frameworks using digital assets as collateral. This is a clear indication of evolving trust in the DeFi space.

“Institutions aren’t just buying exposure,” said Javier. “They’re expanding their exposure to Ethereum, increasingly via treasury companies, staking, infrastructure, and integrations.” 

Additionally, corporations are also shifting treasury allocations from Bitcoin into yield-generating assets like ETH and SOL. This pivot reflects a preference for assets that generate return, not just preserve capital – a change in how crypto is perceived inside boardrooms. But still, Javier Rodriguez cautions that momentum alone isn’t enough. 

“For now, the rally remains driven by timing and liquidity. Without renewed momentum or broader breadth, it risks exhaustion,” he remarked. 

What Lies Ahead? 

Despite inflation data, corporate earnings, and evolution in digital asset regulations, the crypto market is still exposed to macro headwinds. The coming week will demonstrate whether Ethereum’s rally is the beginning of a broader rotation or a short-term relief. But regardless of the outcome, Rodriguez-Alarcón is convinced that something bigger is unfolding. 

“What’s increasingly clear is that the boundaries between digital assets and mainstream finance are blurring, with implications beyond short-term price action,” XBTO’s CIO wrote. 

While the narrative may have shifted toward Ethereum, the long-term story remains one of integration; crypto assets not just existing alongside traditional finance, they are becoming integral to it.