Institutions Move to Bitcoin as Ethereum ETFs Face Outflows

BlackRock, the world’s largest asset manager, has made a significant move in the cryptocurrency market by depositing 44,774 ETH and 900 BTC into Coinbase Prime, valued at approximately $297 million as of the transaction date. This follows a broader trend of institutional accumulation in digital assets, with BlackRock and other major players such as Fidelity and Grayscale continuing to build exposure to Bitcoin and Ethereum through their respective exchange-traded fund (ETF) vehicles.

The Ethereum deposit into Coinbase Prime represents a large-scale allocation of digital assets and reflects the firm's strategy of leveraging its ETF infrastructure to facilitate investor access to the crypto market. BlackRock’s iShares Bitcoin Trust (IBIT) has also seen substantial inflows in recent weeks, with the fund adding $289.8 million in fresh capital on September 3, bringing its total assets under management to $58.6 billion. This contrasts with Ethereum ETFs, which have experienced net outflows over the past several days, suggesting a temporary shift in institutional preference toward Bitcoin as a perceived safer asset class [1].

The broader crypto market has shown diverging trends between Bitcoin and Ethereum, with Bitcoin ETFs gaining momentum while Ethereum products face pressure from outflows. Data from SoSoValue indicates that Bitcoin spot ETFs posted a net inflow of $301.3 million on September 3, whereas Ethereum ETFs lost $135.3 million during the same period. BlackRock’s ETHA fund, the largest Ethereum ETF by assets, led the outflow with $151.9 million in withdrawals, highlighting the uneven institutional reception between the two leading cryptocurrencies [2].

Analysts have interpreted these movements as a combination of profit-taking and macroeconomic concerns influencing institutional strategy. Following a strong inflow period in August, many investors are now locking in gains, while shifting capital into Bitcoin as uncertainty surrounding labor data and broader economic risks persists. Farzam Ehsani, CEO of VALR, noted that Ethereum ETFs lack the ability to stake their holdings, making the asset less appealing during risk-off periods compared to Bitcoin [3].

Despite the recent outflows, Ethereum’s long-term fundamentals remain robust. Whale activity shows that large holders have been increasing their ETH positions, with a 14% rise in holdings over five months. This suggests that while institutional investors may be temporarily rebalancing, broader market dynamics continue to support Ethereum’s value proposition. BlackRock remains a key player in both Bitcoin and Ethereum ETF markets, with its ETHA fund accounting for nearly all of the $13.34 billion in cumulative Ethereum ETF inflows since launch [3].

The ongoing divergence in ETF flows reflects broader market positioning and risk appetite. Bitcoin’s relative stability in volatile markets has made it an attractive option for investors seeking digital assets with lower beta characteristics. Meanwhile, Ethereum’s performance is more closely tied to market sentiment and speculative activity, making it more susceptible to short-term fluctuations. As the crypto market continues to evolve, institutional investors are clearly adapting their strategies to navigate the changing landscape.

Source:

[1] BlackRock and Fidelity Pour Over $500M Into Bitcoin in One Day (https://cryptodnes.bg/en/blackrock-and-fidelity-pour-over-500m-into-bitcoin-in-one-day/)

[2] Ethereum ETFs Bleed Amid $301M BTC Inflow, Yet Whales ... (https://finance.yahoo.com/news/ethereum-etfs-bleed-amid-301m-210041289.html)

[3] Ethereum ETFs Shed $788M Over Four Days in Institutional ... (https://finance.yahoo.com/news/ethereum-etfs-shed-788m-over-113308429.html)