Ethereum News Today: Institutional Capital Flees Ethereum ETFs Amid Risk-Off Shift Toward Bitcoin

U.S. spot Ethereum (ETH) exchange-traded funds (ETFs) experienced a significant outflow of capital over the past week, with Ether-related funds shedding a total of $912 million. This marks one of the most substantial outflows since the launch of these ETF products, according to industry reports. Grayscale’s ETHE recorded the largest single-day outflow of $309.9 million on September 5, while Fidelity’s FETH saw $216.7 million in redemptions on September 4. BlackRock’s ETHA saw a reversal in flows, with $148.8 million in inflows on September 4 followed by $309.9 million in outflows the next day. The most significant outflow came on Thursday, when $446.8 million left Ethereum ETFs, marking the largest single-day exodus since August 4 [1].

This outflow contrasts with the performance of Bitcoin (BTC) ETFs, which recorded net inflows of $250.3 million over the same period. The divergence in fund flows highlights a shift in institutional capital away from Ethereum and toward Bitcoin. Analysts suggest that this shift is partly driven by profit-taking after a strong influx of capital into Ethereum ETFs in August, which totaled $3.87 billion. Additionally, Ethereum ETFs are currently unable to stake their holdings, making them less attractive in a risk-off environment compared to Bitcoin ETFs, which do not face the same limitation [1].

The broader crypto ETF market saw a net outflow of $352 million in early September, according to CoinShares. This decline in inflows was accompanied by a 27% drop in trading volumes, signaling a cooling in investor appetite for publicly traded crypto funds. While Ethereum ETFs bore the brunt of the outflows, Bitcoin ETFs saw inflows of $524 million, helping to offset some of the broader market weakness. Despite the recent decline, inflows for crypto ETFs in 2025 are still ahead of 2024, indicating that overall sentiment in the sector remains positive [2].

Analysts attributed the capital shift to macroeconomic concerns and a general flight to safer assets during periods of market turbulence. “ETH is seen as a higher-beta play, making it the first target when risk appetite decreases,” said Konstantin Anissimov, CEO of Currency.com. Ethereum’s price has remained relatively flat over the past week, trading at $4,304 on CoinGecko, while Bitcoin has outperformed, rising 2.1% over the same period. This performance aligns with the observed rotation of capital toward Bitcoin as a perceived safer investment amid uncertain economic conditions [1].

Despite the outflows, some observers remain optimistic about Ethereum’s long-term fundamentals. Whale activity suggests continued confidence in the asset, with large ETH holders increasing their positions by 14% over five months. Staking growth, decentralized finance (DeFi) activity, and overall network health remain strong, indicating that the outflow is more a matter of timing than a fundamental shift in investor sentiment. “The outflows should be seen less as a vote of no confidence and more as a natural repositioning,” said Farzam Ehsani, CEO of VALR. This perspective underscores the dynamic and evolving nature of the crypto ETF landscape as investors adjust their exposures in response to both market conditions and macroeconomic trends [1].

Source:

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

[2] Crypto ETFs Log Outflows as Ether Funds Shed $912M (https://cointelegraph.com/news/crypto-etfs-outflows-ether-funds-shed-912m-report)