Arbitrum, Plasma, and Avalanche Lead in Cross-Chain Bridge Inflows as Ethereum Suffers Outflows

Arbitrum’s cross-chain bridge led all public chains with a 7-day net inflow of $6.1575 billion as of March 9. Plasma and Avalanche followed with net inflows of $4.4233 billion and $2.9088 billion, respectively. These figures reflect a shift in capital toward Layer 2 solutions and alternative blockchains.

Ethereum, in contrast, experienced a 7-day net outflow of $4.364 billion over the same period. Mantle and Hyperliquid also posted outflows of $1.8356 billion and $1.5224 billion, respectively. The trend underscores a broader movement away from Ethereum-based ecosystems.

Ethereum spot ETFs continued to see net outflows in early March, with Fidelity’s FETH and Grayscale’s ETH being the largest contributors. On March 6, FETH alone recorded an outflow of $67.57 million. These outflows highlight ongoing investor caution and potential downward pressure on Ethereum’s price.

Why Did This Happen?

Capital is increasingly flowing into Layer 2 solutions like Arbitrum and Plasma, which offer faster transaction speeds and lower fees compared to Ethereum. This shift is driven by user demand for more efficient and cost-effective blockchain infrastructure.

Ethereum’s outflows can also be attributed to market dynamics and investor sentiment. Fidelity’s FETH and Grayscale’s ETH have consistently seen outflows in recent weeks. On March 3, FETH alone recorded a $66.73 million outflow. These movements reflect a broader reassessment of risk and return in the crypto market.

Despite the outflows, Ethereum’s price briefly rose above $2,000 on March 4 amid renewed optimism. This price movement was partly driven by U.S. President Donald Trump’s comments on stablecoin yields. However, the price retested a key resistance level at $2,090, indicating potential volatility ahead.

The U.S. Treasury’s recent acknowledgment of legitimate privacy use cases for crypto mixers has also influenced market sentiment. Treasury disclosed that $1.6 billion in mixed funds have flowed into crypto bridges since May 2020. This data highlights the complexity of tracking illicit financial flows through decentralized networks.

What Are Analysts Watching Next?

Investors are closely monitoring Ethereum’s price action and ETF inflow/outflow patterns. If Ethereum breaks above $2,140, it could rally toward $2,500. A rejection below this level could lead to a decline toward $1,820. ETF inflows will also be a key factor in determining the near-term outlook.

Ethereum co-founder Jeffrey Wilcke’s recent move of $157 million in ETH to Kraken has also raised concerns about potential liquidation. This activity follows a similar pattern from 2025 and could signal custodial asset management rather than a bearish market signal.

The broader market is also watching for regulatory developments, particularly around crypto mixers and suspicious financial flows. The Treasury’s proposed “hold law” framework aims to require financial institutions to flag mixed cryptocurrency transactions without automatically freezing accounts. This policy could impact how institutions handle crypto transactions in the future.

Union Pacific (UNP) is exploring a potential merger with Norfolk Southern, which could generate $2.75B in annualized synergies. This merger is expected to improve operational efficiency and reduce transportation costs. However, regulatory delays pose short-term uncertainty for the railroad giant.