Bitcoin and major altcoins have posted sharp gains, but Cryptex Finance data suggests the cryptocurrency rally has not yet produced a broad rotation of capital beyond Bitcoin and Ethereum.
Cryptex Finance tracks 36 digital assets representing approximately 92% of the cryptocurrency market. Its co-founder, Joe Sticco, told crypto.news that participation in the rally had widened, while capital allocation had not kept pace. As a result, cryptocurrencies have traded more like a single market than a group of assets in which investors are selecting individual winners.
Cryptex’s market index reached 1,199.69, nearly 20% above its 1,000 base level set on Feb. 20. The index tracks assets across five sectors using Coinbase pricing, offering a broader view than Bitcoin or a small group of leading altcoins.
Over the previous seven days, however, the index had gained only 1.92%. Sticco said much of the rally from recent lows occurred during a roughly 72-hour period between Aug. 19 and Aug. 21, followed by several days of relatively flat trading.
“Measure from the low, and you get a rally. Measure the trailing week, which is what most readers think they’re being told, and you get almost nothing,” Sticco said.
Bitcoin’s acceleration during that period followed a major derivatives flush alongside renewed spot demand. Earlier market coverage showed $BTC rising from below $65,000 to approximately $69,500 on Aug. 19 as more than $1 billion in cryptocurrency short positions were liquidated within an hour.
Cryptocurrency gains show limited separation between assets
Price dispersion within the Cryptex index provides another reason Sticco is reluctant to describe the move as a full capital rotation.
On the day measured by Cryptex, the strongest constituent rose 6.71%, while the weakest fell 1.49%. Although the index covers 36 cryptocurrencies across five sectors, the difference between the best and worst performers was only about eight percentage points.
“That is not a market sorting winners from losers. That’s a market moving as one block,” Sticco said.
Sticco said the low level of dispersion indicates that a common market factor is lifting cryptocurrencies together, rather than investors shifting money between assets based on their individual fundamentals.
Major tokens still recorded notably different headline gains over the broader rally. Sticco estimated Bitcoin’s seven-day increase at roughly 14%, compared with 28% for $XRP and about 19% for Solana.
Capital allocation did not reflect that apparent range of price performance. Bitcoin dominance remained between approximately 57% and 60%, depending on the market universe used. Sticco also cited an Altcoin Season Index reading below 40, well below the 75 threshold generally used to identify an altcoin season.
Solana remained more than 50% below its October 2025 level despite gaining about 19% during the week, according to Sticco.
“Participation broadened. Allocation didn’t,” he said.
Institutional cryptocurrency flows remain concentrated in Bitcoin and Ethereum
Regulated investment products provide another way to distinguish rising cryptocurrency prices from the destination of new capital.
During one recent Wednesday session, U.S. spot Bitcoin ETFs received approximately $232 million, while Ether ETFs attracted roughly $192 million, Sticco said. $XRP products brought in around $28 million, compared with approximately $15 million for HYPE products and $9 million for Solana.
By Sticco’s calculation, nearly nine out of every 10 dollars went into Bitcoin and Ethereum. Weekly figures showed a similar concentration, with Bitcoin receiving approximately 71% of flows and Ethereum another 26%.
The concentration has persisted as U.S. spot products have supported Bitcoin’s recovery. A previous report on ETF demand found that U.S. spot Bitcoin ETFs received approximately $1.9 billion over five consecutive inflow sessions by Aug. 24. Analysts said continued spot buying would be necessary after forced short covering helped accelerate the initial breakout.
Sticco said the subsequent streak had reached eight consecutive sessions of net Bitcoin ETF inflows totaling approximately $2.8 billion. Ether ETFs had also recorded eight positive sessions and more than $1 billion in inflows.
August Bitcoin ETF inflows had exceeded $3 billion by the time of his comments, making it the strongest month of 2026, according to Sticco. He said BlackRock had absorbed a significant share of the demand, including approximately $1.3 billion during the previous week.
“Eight straight sessions of regulated spot creations is not what a short squeeze produces,” he said.
ETF figures nevertheless require an additional distinction when measuring the amount of new institutional money entering Bitcoin.
Sticco said the net assets held by the funds had increased from approximately $77 billion in mid-August to just above $99 billion by Tuesday, a gain of about $22 billion. Actual net inflows during the eight-session streak totaled only around $2.8 billion.
Much of the difference came from Bitcoin’s rising price, which increased the value of assets already held by the funds, rather than from investors providing another $22 billion in fresh capital, he said.
Earlier in August, five consecutive inflow sessions brought approximately $853.5 million into U.S. spot Bitcoin ETFs between Aug. 3 and Aug. 7, reversing withdrawals recorded during the preceding week.
Sticco also cautioned against assessing August in isolation. He said spot Bitcoin ETFs had lost roughly $5.4 billion during the first half of 2026 and remained approximately $2.5 billion in negative territory for the year despite the latest inflows.
ETF demand offers a clearer signal than derivatives positioning
Distinguishing institutional buying from leveraged trading requires examining different parts of the market, according to Sticco.
ETF flows and market depth measure demand, while funding rates, futures basis and open interest provide more information about trader positioning. Sticco said falling open interest alongside rising prices can indicate that short positions are closing rather than that new buyers are entering the market.
He declined to characterize current open interest as either bullish or bearish because publicly available readings differed. Some datasets measure open interest in Bitcoin, while others use its dollar value, producing different trends when $BTC moves sharply.
Market depth presents a similar challenge. Sticco described depth as one of the most useful measures of institutional participation because it shows how much capital can enter or exit without materially moving prices.
“Price tells you what the last trade cleared at. Depth tells you what the next big one will cost.”
Publicly available depth figures were not current enough for Sticco to determine how much liquidity had recovered. He pointed to the damage caused by the October 2025 deleveraging event, when an estimated $10 billion to $20 billion in leveraged positions were erased and Bitcoin’s top-of-book depth on major venues fell by more than 90% intraday.
According to Sticco, market makers subsequently reduced resting liquidity after being left with inventory while hedges were force-closed. That left order books at their thinnest levels since 2022.
Sticco said the institutional side of the cryptocurrency market had therefore developed faster than the liquidity supporting the underlying market.
U.S. policy and Treasury conditions contribute to the crypto rally
Macroeconomic conditions have also played an important role in the latest advance, according to Sticco. He identified the U.S. Treasury’s Aug. 19 decision to increase long-dated debt buybacks as an important catalyst.
The Treasury doubled the maximum size of certain long-end liquidity-support buybacks from $2 billion to at least $4 billion per operation. The announcement was followed by falling long-term yields and an 8.2% Bitcoin advance from an intraday low near $64,100 to approximately $69,500 in less than 12 hours.
Sticco said Bitcoin’s close relationship with software stocks during the move showed how closely cryptocurrency had become linked to U.S. macroeconomic conditions. As interest-rate expectations later changed and short-term yields rose, Bitcoin surrendered some of its gains even though the legislative situation in Washington had not materially changed.
Congress represents another variable for U.S. investors. Sticco pointed to the CLARITY Act, which would establish a statutory division of responsibilities between the SEC and CFTC for parts of the digital asset market. The legislation would also create a federal framework affecting exchanges, brokers, dealers and custody services.
The Senate Banking Committee advanced the legislation by a 15-9 vote in May, with Democratic Sens. Ruben Gallego and Angela Alsobrooks joining Republicans. Sticco, who attended the markup as part of Cryptex’s policy work, said both Democrats made clear at the time that their committee votes did not guarantee support on the Senate floor without progress on unresolved provisions.
A Sept. 15 cloture vote requires 60 votes to move the legislation forward. Previous coverage of the negotiations identified ethics rules, stablecoin rewards and financial-crime provisions as issues that remained unresolved ahead of the procedural vote.
For regulated index products, Sticco highlighted provisions covering CFTC registration for digital commodity exchanges, brokers and dealers. He said capital, asset-segregation, surveillance and customer-protection requirements could increase the number of regulated venues capable of supporting assets used in exchange-traded products.
Sticco also cited custody provisions and changes affecting financial holding companies as potentially important for institutions. He argued that statutory classification of digital assets would give index providers greater certainty than relying on agency interpretations that future regulators could change.
Policy expectations have weakened even as cryptocurrency prices have risen. Sticco said Polymarket odds for the CLARITY Act becoming law in 2026 had fallen from approximately 82% in February to around 25% in late August, while Galaxy Research placed the probability closer to 10%.
The Sept. 15 vote will also take place on the first day of the Federal Reserve’s Sept. 15-16 meeting, putting two major U.S. policy events in the same period.
According to Sticco, unresolved Senate negotiations include ethics and conflict-of-interest rules involving government officials, possible secondary enforcement authority for state attorneys general, illicit-finance provisions and banking-industry objections to crypto exchanges paying yield on stablecoin balances.
