Investors Abandon ETH ETFs as Staking Gaps Test Loyalty

Spot Ether (ETH) exchange-traded funds (ETFs) have experienced $1.04 billion in net outflows over six consecutive trading days, with the largest single-day outflow reaching $446.7 million on Friday and the smallest at $38.2 million on Wednesday. On Monday alone, ETH ETFs recorded $96.7 million in outflows, with BlackRock’s ETHA fund seeing the largest withdrawal at $192.7 million. This outflow was partially offset by inflows into Fidelity’s FETH ($75 million), Grayscale’s ETHE ($9.5 million), and its mini fund ($11 million). Total trading volume reached $1.52 billion, and overall net assets fell to $27.39 billion, representing 5.28% of Ethereum’s market cap according to data from SoSoValue [1].

The outflows come amid growing macroeconomic uncertainties and shifting investor sentiment around the Federal Reserve’s rate-cut trajectory. Although the CME FedWatch Tool indicates a 100% probability of a 25 basis point cut in September, analysts warn that such cuts may not provide the anticipated economic boost. JPMorgan Asset Management’s chief global strategist, David Kelly, noted that lower rates could reduce retirement income and dampen business sentiment, potentially worsening the macroeconomic outlook. This shift is evident across markets, with Treasury yields remaining soft, the U.S. dollar trading sideways, and gold climbing, all of which signal a defensive positioning by investors [1].

Ethereum’s price has also been affected by this outflow trend. The asset is currently hovering near the $4,250–$4,300 support level, with key resistance near $4,500. Similar patterns are observed in Bitcoin, which faces liquidation pressure near $108,800 and resistance at $114,200. Despite the outflows, some analysts remain cautiously optimistic, suggesting that Ethereum ETFs could see a rebound if the price continues to rise. This is supported by recent gains in Ethereum, which is up 16.35% over the past 30 days, despite a 2.92% decline in the last seven days [1][5].

While Ethereum ETFs are losing traction, spot Bitcoin ETFs have seen a positive shift. On Monday, they attracted $368.25 million in net inflows, ending a two-day outflow streak that had drawn more than $387 million. Total trading volume for Bitcoin ETFs reached $3.02 billion, with total net assets rising to $145.41 billion and cumulative net inflows reaching $54.86 billion. This inflow into Bitcoin ETFs highlights a potential reallocation of capital within the crypto space, with investors shifting toward Bitcoin amid Ethereum ETF outflows [1].

The current outflow pattern is influenced by several factors, including Ethereum ETFs’ lack of staking capabilities. Unlike other investment vehicles, U.S. spot ETH ETFs do not engage in proof-of-stake validation, meaning they do not earn staking rewards. This absence of yield can reduce investor incentive to hold during price downturns, particularly when on-chain staking returns are available. BlackRock’s iShares Ethereum Trust prospectus explicitly states that the fund will not stake its ether or earn staking income. This structural limitation could become a significant differentiator if the SEC approves staking in the future, as analysts predict such a move could "flip the switch on demand," boosting institutional inflows and liquidity [3].

Looking ahead, the ETF market for Ethereum remains highly sensitive to macroeconomic data releases and regulatory developments. The SEC’s stance on staking within U.S. spot ETFs is a key variable, with potential approval expected as soon as Q4 2025, according to Bloomberg ETF analysts. In the short term, however, the outflows reflect a broader market reassessment of risk, with investors taking a more cautious stance in light of economic and geopolitical uncertainties. As the ETF landscape continues to evolve, the ability of Ethereum ETFs to retain investor confidence will likely depend on structural changes, such as the introduction of yield-generating mechanisms, as well as broader market dynamics [1][3].

Source:

[1] Spot Ether ETFs Bleed $1B amid macro uncertainty (https://cointelegraph.com/news/spot-ether-etfs-bleed-1b-amid-macro-uncertainty)

[2] Spot ETH ETFs Face Alarming Outflows: What's Driving the Market Shift? (https://www.mexc.co/fil-PH/news/spot-eth-etfs-face-alarming-outflows-whats-driving-the-market-shift/89883)

[3] Ethereum ETFs hit by $1 billion pullback as lack of staking yield tests conviction (https://cryptoslate.com/ethereum-etfs-hit-by-1-billion-pullback-as-lack-of-staking-yield-tests-conviction/)

[4] Gold Holds Near Latest Record as Fed Rate-Cut Optimism Fades (https://finance.yahoo.com/news/gold-holds-near-latest-record-002112667.html)

[5] Ether ETFs Post 4-Day Outflows After Strong August (https://cointelegraph.com/news/ether-etf-outflow-week-traders-high-hopes-rebound)