‘Ether Caught Fire’: ETH Surged as Capital Fled Bitcoin in Q3, CoinGecko Report Finds

Core Insights - Ethereum (ETH) has emerged as the leader in the cryptocurrency market's recovery during the third quarter, surpassing Bitcoin (BTC) as capital shifted towards altcoins, DeFi protocols, and tokenized assets [1][2] - The overall cryptocurrency market added over $500 billion in value, marking its second consecutive quarter of significant growth, with Ethereum and other large-cap tokens driving this momentum rather than Bitcoin [2] - By September, Bitcoin's momentum slowed while Ethereum experienced a surge, attributed to ETF demand, interest in tokenized real-world assets, and corporate treasury investments, leading to a new all-time high for ETH [3] Market Dynamics - Trading activity rebounded strongly after two quarters of decline, with spot volumes increasing across both centralized and decentralized exchanges, indicating a shift in where trading volume is directed [4] - Meme coins made a notable comeback, with tokens like M gaining popularity, while stablecoins such as USDe also gained traction, and lesser-known altcoins entered the top 30 by market capitalization [5] - DeFi protocols, which had seen reduced attention in late 2024, experienced a resurgence as total value locked in lending and staking protocols increased alongside Ethereum's rise [5] Investor Behavior - A shift in investor appetite is evident, with Bitcoin's market share declining, indicating a movement towards Ethereum and other emerging categories, particularly tokenized assets [6] - New on-chain stocks and bonds are gaining traction, with protocols like Ondo and Backed Finance appealing to investors seeking to connect traditional and decentralized finance [7] - Bitcoin's price movement has decoupled from the S&P 500 for the first time in over a year, suggesting that cryptocurrency is becoming a more independent asset class, although this also reflects a fragmentation of investor attention [8]