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Welcome to your weekly crypto newsletter. This week, all eyes are on Ethereum's historic 50% July surge: the strongest monthly performance in three years. This has been driven by an unprecedented convergence of institutional adoption, record ETF inflows, supply constraints, and DeFi ecosystem maturation that's creating what we're calling The ETH Squeeze.

Weekly Key Metrics

Bitcoin BTC
Price
$115,551 -1.2%

Total Fees 

$4.36M +17.2%

Exchange Flows

$411.99M

Ethereum ETH
Price
$3,677 -4.7%

Total Fees

$8.91M -42.3%

Exchange Flows

-$1.73B

Network Fees - Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether

• Bitcoin fees saw an uptick driven by institutional activity
• Ethereum fees were moderated, which continue being impacted by the widespread adoption of Layer 2 scaling solutions

Exchanges Netflows  - The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges

• BTC recorded inflows, likely reflecting profit-taking following the rally of the previous two weeks
• ETH saw a massive $1.73B net outflow, the largest in over a year and the third consecutive week of major outflows, signaling a severe supply crunch on exchanges

The ETH Squeeze

Source: SoSoValue

ETF Tsunami: $5.41B Inflows Shatter Records

July 2025 will be remembered as the month Ethereum ETFs came of age. Spot Ethereum ETFs experienced a record-breaking $5.43 billion net inflow in July alone, exceeding the total cumulative inflow of $4.21 billion from all previous months combined since their launch.

The momentum has been relentless: Ethereum ETFs recorded 29 consecutive days of net inflows between July 2-31, 2025, with BlackRock's ETHA ETF leading with $440 million in a single day. This 29-day net inflow streak totaled over $5.43 billion net monthy inflows, with $21.5 billion of AUM over all ETH spot ETFs.

The week ending July 18 was one of the strongest periods for Ethereum ETF inflows, seeing almost $2.2 billion in net capital added. This sustained demand marks a new market where institutional flows rather than retail sentiment increasingly determine ETH's valuation.

Source: CoinMarketCap

DeFi Dominance: $179B TVL Hits 3-Year High

The DeFi market surged to a three-year high of $179 billion, spurred by ETH's ascent toward $4,000 and significant inflows into liquid staking protocols. Ethereum blockchain still commands 63% of all DeFi capital locked on-chain, with the majority attributed to the lending powerhouse, Aave.

Aave, DeFi's largest lender, surpassed $50 billion in TVL for the first time, with $25 billion out of those being ETH or ETH derivatives. The protocol's dominance reflects institutional confidence in Ethereum-native financial infrastructure.

Liquid staking platforms continue to be particularly successful, allowing users to stake ETH while retaining liquidity through tokenized derivatives. Lido is leading, reaching $33 billion in TVL, mostly related to the ETH price increase.

The ecosystem's maturation is evident in yield optimization strategies. Advanced users can now secure annual returns of up to 15% on USDC and other stablecoins with relatively low risk through strategies relying on derivatives and lending markets. This sophisticated infrastructure attracts institutional capital seeking yield beyond traditional markets.

Source: Defillama

The Great Supply Squeeze: 35M ETH Locked Away

The most powerful force behind ETH's rally may be the simplest: there's dramatically less ETH available to buy. Over 35 million ETH is now staked across various platforms, representing nearly 30% of the cryptocurrency's total supply, which is at around 120 million. This figure creates a noticeable reduction in liquid supply, as staked ETH becomes illiquid and unavailable for immediate trading. The approval of staking ETFs will make this situation even more dramatic if they gain success.

Exchange Exodus: Ethereum's supply on centralized exchanges has dropped sharply, hitting a 2025 low of 18.7 million ETH according to CryptoQuant, down from over 19.8 million earlier in the year. Over the last 3 weeks, exchanges have experienced net outflows surpassing the billion each week.

Source: IntoTheBlock

The convergence of these four forces creates a compelling bull case for Ethereum:

• Supply-Demand Imbalance: With institutional demand surpassing the 15,000+ ETH daily versus network issuance of ~1,500 ETH daily, the structural deficit is mathematically unsustainable at current prices.
• Institutional Validation: BlackRock's $11.4 billion bet and record ETF inflows provide institutional legitimacy that reduces regulatory risk and attracts more institutional capital.
• Ecosystem Maturation: $179 billion in DeFi TVL demonstrates real utility driving demand, while liquid staking creates additional yield opportunities that attract capital.
• Technical Setup: With 30% of supply locked in staking and exchange reserves at multi-year lows, even modest buying pressure can create outsized price moves.

In summary, this convergence represents more than a typical crypto rally. It is a fundamental repricing of Ethereum as institutional infrastructure. As regulatory clarity improves and more institutions build Ethereum strategies, the path toward $4,000 appears increasingly inevitable, though volatility remains high and profit-taking at psychological levels could create temporary setbacks. For now, "The ETH Squeeze" shows no signs of abating, with institutional flows continuing to outpace network issuance by massive margins. The next few weeks will be critical in determining whether this historic supply-demand imbalance can propel ETH to new all-time highs above its previous $4,878 peak.

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