Ethereum News Today: Institutional Exodus from Ethereum ETFs Sheds Light on Bitcoin's Rising Institutional Appeal

Large institutional investors Fidelity, Grayscale, and VanEck have reportedly been liquidating their Ethereum (ETH) positions in recent trading sessions, contributing to a decline in the cryptocurrency's price. According to data from SoSoValue, Ethereum ETFs experienced a net outflow of $167.41 million over four consecutive days, starting on August 29 and continuing through early September. Fidelity’s FETH fund, the largest Ethereum ETF, saw the most significant outflow, totaling $216.68 million on a single day. Grayscale’s Ethereum Mini Trust and Bitwise’s ETHW also recorded notable outflows, marking a reversal of the inflow momentum seen in August [5].

The sell-off by major fund managers has coincided with Ethereum’s price stalling at $4,275 as of September 5, 2025. While BlackRock’s ETHA fund bucked the trend by securing a net inflow of $148.8 million, the broader ETF landscape for Ethereum has shown signs of investor caution. Institutional buying activity has continued, however, with companies like Bitmine and SharpLink Gaming acquiring substantial amounts of ETH. Bitmine alone purchased 78,000 ETH on August 28 and an additional 74,300 ETH on September 2 [5]. Despite this, the ETF outflows have created downward pressure on Ethereum’s price, which fell 1.4% amid the selling pressure.

Meanwhile, Bitcoin ETFs saw a net inflow of $301.3 million on September 3, highlighting a shift in institutional capital away from Ethereum. BlackRock’s iShares Bitcoin Trust (IBIT) led the inflows with $289.8 million, boosting its AUM to $58.6 billion. This trend underscores a growing preference for Bitcoin over Ethereum among some institutional investors, with Bitcoin ETFs collectively holding $145.2 billion in assets as of September 3 [6]. Ethereum ETF activity had previously surged in August, with total inflows reaching $3.87 billion during the month, compared to only $751 million in outflows for Bitcoin.

Analysts suggest the recent Ethereum ETF outflows may reflect short-term profit-taking or shifting investor sentiment toward Bitcoin. Ethereum’s price has faced headwinds despite a historically strong ecosystem, including growing staking participation and tokenization of real-world assets. Nearly 36 million ETH are staked, representing about one-third of the total supply, with staking rewards averaging 2.9% APR. Additionally, tokenization on Ethereum has grown to $24 billion by mid-2025, up from $5 billion in 2022 [3].

The ETF outflows come at a time when Ethereum had recently broken a new price record, trading at $4,953 in August. However, the September sell-off has seen the price fall back below that level. The divergence between Ethereum and Bitcoin ETF activity has been particularly notable, with Bitcoin ETF volumes reaching $78.1 billion in September, compared to $58.3 billion for Ethereum in August. The market dynamics suggest that while Ethereum remains a significant player in the crypto space, its dominance in ETF inflows has waned in favor of Bitcoin in the short term [6].

Despite the ETF outflows, Ethereum’s long-term prospects remain supported by key developments. Samir Kerbage, CIO at Hashdex, has highlighted three catalysts that could drive Ethereum’s price higher, including the tokenization of real-world assets and the rise in staking yields. Bank of America forecasts the tokenization market on Ethereum to reach $16 trillion over the next 15 years [3]. Analysts like Tom Lee from Fundstrat Capital have also suggested Ethereum could reach a valuation of $62,000 if it attains a 0.25 ETH/BTC ratio, projecting a potential $12,000 to $22,000 range if the historical average ratio is restored [4].

Source: [1] Ethereum ETFs See Four-Day Outflow, ETH Price Stalls at $4,275 (https://coincentral.com/ethereum-etfs-see-four-day-outflow-eth-price-stalls-at-4275/) [2] Ethereum ETFs Bleed Amid $301M BTC Inflow, Yet Whales Scoop Up $620M in Ether as Institutions Boost Exposure (https://finance.yahoo.com/news/ethereum-etfs-bleed-amid-301m-210041289.html) [3] Three reasons why Ethereum's price is seen to be heading for new highs (https://finance.yahoo.com/news/three-reasons-why-ethereum-price-154336373.html) [4] Ethereum Could Reach $62,000 If It Hits This ETH/BTC Ratio (https://finance.yahoo.com/news/tom-lee-ethereum-could-reach-203041720.html)