Ethereum News Today: Investors Abandon Ethereum ETFs as Bitcoin Pulls Them Back

Ethereum-focused ETFs experienced a significant shift in investor sentiment in late August and early September 2025, with notable outflows recorded across major funds. Fidelity, Grayscale, and VanEck were among the firms witnessing large-scale redemptions from their Ethereum ETF offerings, signaling a pullback after months of inflows. This trend contrasts with Bitcoin ETFs, which saw a rebound in net inflows during the same period.

According to data from Farside Investors, Ethereum ETFs posted a cumulative outflow of $787.6 million over four days, with Friday alone accounting for $446.8 million in redemptions. This follows a strong August, where Ethereum ETFs had drawn $3.87 billion in net inflows. The outflows align with a recent dip in ETH prices, which fell to $4,209 on September 1, the lowest level since mid-August. Traders and analysts have linked the ETF outflows to a broader shift in investor behavior, particularly a reluctance to buy during price declines [3].

Among the largest Ethereum ETFs, Fidelity’s FETH fund saw the most substantial outflow, with $216.68 million leaving the fund. Grayscale’s Ethereum Covered Call ETF (ETCO), launched on September 4, 2025, also reported early challenges, with a market price of $34.27 and a 2.73% decline in net asset value (NAV) per share. The fund's strategy involves generating income through options on Ethereum ETPs, but its early performance has been marked by volatility and a 0.64% premium-discount spread [1].

BlackRock’s ETHA, the largest Ethereum ETF by assets under management, bucked the trend by attracting a net inflow of $148.8 million. Despite this, the fund reported an outflow of $151.9 million on September 3, indicating mixed investor sentiment [5]. The broader Ethereum ETF market has seen a net outflow of $13.34 billion since its inception, with BlackRock dominating the space with nearly $13.1 billion in assets.

Institutional investors continue to show strong interest in Ethereum, with companies like Bitmine and SharpLink Gaming making large acquisitions of ETH. Bitmine alone added 78,000 ETH on August 28 and another 74,300 ETH on September 2, suggesting that long-term demand remains robust [5]. Whale activity also supports this view, as large Ethereum holders have increased their holdings by 14% over the past five months, according to Santiment [3].

Despite the recent ETF outflows, Ethereum advocates remain optimistic. Tom Lee, chairman of BitMine, reiterated his long-term price target of $60,000 for ETH, drawing parallels to historical turning points in the crypto market [3]. This optimism is partly fueled by the growing adoption of Ethereum-based technologies and the expansion of institutional treasuries, which now hold 2.97% of the total ETH supply, valued at $15.49 billion [3].

The Ethereum ETF outflows coincide with a broader shift in capital away from the asset class, as investors appear to be rotating into Bitcoin. Spot Bitcoin ETFs recorded a net inflow of $301.3 million on September 3, with BlackRock’s iShares Bitcoin Trust (IBIT) leading the trend with $289.8 million in inflows. Bitcoin ETFs now hold 6.5% of the cryptocurrency's total market capitalization, with cumulative inflows reaching $54.8 billion [6].

The divergence in investor sentiment reflects a broader pattern where Ethereum ETFs have struggled to maintain the momentum seen earlier in the year. While the Ethereum price has stabilized slightly, the ETF outflows continue to weigh on the asset. Analysts suggest that if Ethereum’s price can stabilize or move higher, ETF flows may follow, but for now, the trend indicates a cooling of enthusiasm for the second-largest cryptocurrency.

Source:

[1] Grayscale Ethereum Covered Call ETF (ETCO) (https://etfs.grayscale.com/etco)

[2] Digital Assets | Insights (https://www.vaneck.com/us/en/insights/digital-assets/)

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

[4] Ether Enthusiasm Cools as ETFs Shed $505M in 4-Day Slide (https://www.coindesk.com/markets/2025/09/05/ether-enthusiasm-cools-as-etfs-shed-usd505m-in-4-day-slide-flipping-bitcoin-funds)

[5] Ethereum ETFs See Four-Day Outflow, ETH Price Stalls at $4,275 (https://coincentral.com/ethereum-etfs-see-four-day-outflow-eth-price-stalls-at-4275/)

[6] Ethereum ETFs Bleed Amid $301M BTC Inflow, Yet Whales Scoop Up $620M in Ether (https://finance.yahoo.com/news/ethereum-etfs-bleed-amid-301m-210041289.html)