Ethereum News Today: Investors Flee Ethereum ETFs as Staking Delays Mount

Ethereum spot ETFs experienced significant outflows this week, with $197 million leaving the funds on Monday alone, marking the second-largest daily outflow since the products launched. This figure includes $87 million from BlackRock’s iShares Ethereum Trust ETF (ETHA) and $79 million from Fidelity’s Ethereum Fund (FETH), according to tracking data from Farside.co.uk and SoSoValue. These outflows come amid a broader trend of shifting investor preferences and growing unstaking activity on the Ethereum network.

The total outflows for the week reached $256 million, combining Monday’s $197 million with an additional $59 million in outflows on Friday. This represents a sharp reversal from the record $3.7 billion in inflows recorded over the previous eight trading days, during which some funds saw single-day inflows exceed $1 billion. Despite the recent outflows, the cumulative Ethereum tokens held in ETFs remain substantial, totaling over 6.5 million tokens, valued at $28 billion, or nearly 5.4% of the cryptocurrency’s total supply. For comparison, treasury entities hold approximately 4.1 million tokens worth $17.6 billion, based on data from StrategicETHReserve.xyz.

Ethereum’s validator unstaking queue has also reached a record high, with 911,718 tokens — worth $3.9 billion — waiting to be withdrawn from staking pools. The average wait time to unstake now exceeds 15 days, a significant increase from 15 days and 14 hours as of Tuesday. This delay has been widely discussed in the crypto community, with Ethereum protocol developer Preston Van Loon noting that the exit queue is a crucial security feature that prevents a mass exodus of validators during network stress or attacks. Van Loon added that the longer wait time helps preserve Ethereum’s economic security, as the cost to attack the network is closely tied to the amount of ETH staked, currently above 35 million tokens since mid-June.

Investor interest in Ethereum is also being shaped by broader market dynamics. Spot Ethereum ETFs have gained traction over the past few weeks compared to Bitcoin ETFs, with data from Hildobby showing that 5% of Ethereum’s total supply is now held in ETFs, slightly outpacing the 6.4% held in Bitcoin ETFs. If the trend continues, analysts predict that Ethereum ETFs could surpass Bitcoin ETFs in terms of supply ownership by September. This shift reflects a growing institutional appetite for Ethereum, as BlackRock’s ETHA fund alone holds 3.6 million ETH — valued at $15.8 billion — as of last week. The fund’s holdings have slightly decreased in value to $15.6 billion by Monday, following a 1.5% decline driven by a 6.5% drop in ETH’s price over the same period.

In a separate but related development, SharpLink Gaming, a treasury firm chaired by Ethereum co-founder Joseph Lubin, announced the purchase of an additional 143,593 ETH tokens for the week ending August 17, at an average entry price of $4,648. This acquisition marked a 10% premium over Ethereum’s current price, which remains around $4,200. The firm now holds a total of 740,760 ETH tokens, valued at approximately $3.2 billion. This activity underscores the continued institutional confidence in Ethereum despite short-term market volatility.

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[1] Ethereum spot ETFs see second-largest daily outflow of ... (https://sherwood.news/crypto/ethereum-spot-etfs-see-second-largest-daily-outflow-of-almost-usd200-million/)

[2] Spot Ether ETFs See $197M Outflows, Second-Largest Ever (https://cointelegraph.com/news/ether-etfs-197m-outflows-second-largest)