Bitcoin News Today: Investors Shift From Ethereum to Bitcoin as Crypto ETFs Cool

Crypto ETPs recorded $352 million in outflows in the latest week, despite weak U.S. payrolls fueling speculation that the Federal Reserve may cut interest rates in September. Ethereum ETFs led the outflows, shedding $912 million, while Bitcoin spot ETFs attracted $246 million in net inflows. This divergence highlights shifting investor sentiment and asset preferences within the crypto ETP market. CoinShares reported a 27% week-over-week decline in trading volumes, indicating a cooling appetite for digital asset products, although year-to-date inflows remain strong at $35.2 billion, outpacing last year’s total by 4.2%.

The U.S. market saw the largest outflows at $440 million, contrasting with inflows of $85.1 million in Germany and $8.1 million in Hong Kong. Ethereum experienced daily outflows across seven consecutive trading days, affecting multiple ETP issuers. According to SosoValue, U.S. spot Ethereum ETFs recorded $788 million in outflows, with no single fund posting net inflows. Meanwhile, Bitcoin ETFs posted two consecutive weeks of positive flows, with BlackRock’s iShares Bitcoin Trust (IBIT) absorbing $434.3 million and expanding assets under management to nearly $58.6 billion. Offsetting some gains, outflows from ARKB, BITB, and GBTC totaled $228.1 million, resulting in a net positive flow for Bitcoin ETFs.

Solana and XRP continued to attract consistent weekly inflows, with Solana extending its streak to 21 consecutive weeks and accumulating $1.16 billion year to date. XRP also added $1.22 billion in the same period. Both tokens are drawing $16.1 million and $14.7 million in weekly inflows, respectively, signaling investor interest in diversifying beyond Bitcoin and Ethereum. Despite the outflows, institutional adoption is growing, with Figma allocating $91 million into Bitcoin ETFs after its July IPO. The company’s stock, however, sold off nearly 20% following the announcement, reflecting ongoing skepticism about corporate crypto exposure. This move contrasts with MicroStrategy’s direct Bitcoin balance sheet strategy, highlighting the evolving role of ETFs as a bridge between institutions and digital assets.

Ethereum’s struggles were further underscored by a four-day outflow streak totaling $787.6 million, with Grayscale's ETHE experiencing the largest single-day outflow of $309.9 million. Fidelity’s FETH and BlackRock’s ETHA also saw significant redemptions, with the latter reversing from inflows of $148.8 million to outflows of $309.9 million. These outflows contrast with Bitcoin’s relative stability, which has gained $250.3 million in inflows over four days and closed at $110,263 as of September 6. Bitcoin’s price remains 2% lower month-to-date but has held above $110,000 for two consecutive sessions, reinforcing its role as a more stable digital asset during turbulent markets.

Analysts suggest that the outflows from Ethereum ETFs reflect a natural repositioning after August’s $3.87 billion in inflows, with many institutional investors likely taking profits. Ethereum’s inability to stake holdings in ETFs has made it less compelling than Bitcoin in risk-off periods. Additionally, macroeconomic factors, including weak labor data and rising recession fears, have prompted institutional capital to shift toward Bitcoin as a safer digital asset. Meanwhile, Ethereum whales have been accumulating ETH, increasing their holdings by 14% over five months, according to Santiment data. Despite the outflows, Ethereum’s fundamentals, including staking growth, DeFi activity, and network health, remain strong, with the outflows attributed more to timing than conviction.

The Federal Reserve’s potential rate cuts remain a key macroeconomic factor influencing ETF flows. Standard Chartered revised its projection to expect a 50 basis point cut at the September Federal Open Market Committee meeting, doubling from its earlier forecast. Markets are pricing in a 90% probability of a 25-basis-point reduction, with a 10% chance of larger cuts. Fed Chair Jerome Powell has indicated that rate cuts are possible but has also warned about persistent inflation threats. Traditional markets responded positively to rate-cut optimism, with the S&P 500, European, and Asian shares rising, while gold surged to record highs above $3,630 per ounce. Bitcoin must continue to prove its appeal as a safe-haven asset amid these macroeconomic shifts, with its ETF inflows serving as a short-term floor in a volatile market.

Source: [1] Crypto Investment Products Record $352M Weekly Outflows (https://finance.yahoo.com/news/crypto-investment-products-record-352m-175228343.html) [2] Bitcoin (BTC-USD) ETF Inflows Hit $250M as Price Holds $110K (https://www.tradingnews.com/news/bitcoin-btc-usd-etf-inflows-top-250m-usd) [3] Crypto Investment Products Shed $352M, Trading Volumes (https://crypto-economy.com/crypto-investment-products-shed-352m-trading-volumes-down-27/) [4] Ethereum ETFs Shed $788M Over Four Days in Institutional (https://finance.yahoo.com/news/ethereum-etfs-shed-788m-over-113308429.html) [5] Crypto ETFs Log Outflows as Ether Funds Shed $912M (https://cointelegraph.com/news/crypto-etfs-outflows-ether-funds-shed-912m-report) [6] Why is Ethereum price failing to break $4.5K? (https://cointelegraph.com/news/why-is-ethereum-price-failing-to-break-4-5k) [7] Crypto Market Update: Bitcoin Climbs Back to US (https://www.nasdaq.com/articles/crypto-market-update-bitcoin-climbs-back-us-113000-ahead-us-jobs-report) [8] The Ethereum ETF approval: Latest News and Full Coverage (https://cointelegraph.com/news/eth-etf)