Ethereum News Today: Investors Turn on Ethereum as Unstaking Storm Gathers

Spot Ether ETFs experienced significant outflows in early August 2025, with nearly $200 million withdrawn on Monday alone, marking the second-largest single-day outflow since the launch of these funds [3]. This trend follows a $59 million outflow on Friday, bringing the two-day total to $256 million [3]. While these outflows are notable, they remain small compared to the record $3.7 billion inflow streak recorded over the previous eight trading days [3].

The decline in ETF inflows coincided with a surge in Ethereum unstaking, with over 87,000 ETH (approximately $3.76 billion) queued to exit the network, a new historical high [1]. This increase in unstaking activity reflects a growing shift in investor strategy, including the unwinding of leveraged positions and arbitrage opportunities [1]. The rise in ETH lending rates, particularly on platforms like Aave, has also played a key role in prompting validators to unstake [1].

BlackRock’s iShares Ethereum Trust (ETHA), the largest Ethereum ETF by assets under management, saw $87 million in outflows on Monday [3]. This marked a reversal from earlier weeks, when the fund had experienced massive inflows. As of August 15, ETHA held around 3.6 million ETH, valued at $15.8 billion [3]. However, by Monday, the fund’s net assets had declined by 1.5% to $15.6 billion, aligning with a broader 6.5% drop in the price of ETH [3]. Fidelity’s Ethereum Fund (FETH) also faced substantial outflows, with $79 million in withdrawals on Monday [3].

The Ethereum unstaking queue has grown rapidly, with validators now needing to wait over 15 days and 14 hours for withdrawals [3]. This prolonged wait time has raised concerns among investors, particularly regarding the potential for large-scale selling pressure. Some industry analysts have warned of a possible “unstakening,” a term used to describe the risk of a sharp drop in ETH prices due to an oversupply of unstaked ETH [3].

Despite these risks, Ethereum ETFs have seen significant growth in investor interest over recent months. In the previous eight trading days, these funds had accumulated $3.7 billion in inflows, with BlackRock’s ETHA leading the way with $2.3 billion in weekly inflows [3]. According to Hildobby, a data analyst at Dragonfly, the percentage of ETH supply held in ETFs is currently at 5%, compared to 6.4% for Bitcoin [3]. If the current growth rate continues, the ETF-ETH supply ratio could surpass that of Bitcoin by September [3].

The rise in ETH ETF holdings is also indicative of broader institutional interest in the asset class. As of August 18, strategic ETH reserve entities and ETFs held over 10.26 million ETH, representing more than 8.4% of the total supply [1]. This institutional accumulation provides a potential buffer against selling pressure from unstaking activity. Additionally, Ethereum’s proof-of-stake (PoS) mechanism limits the rate of validator exits, with only 8–10 validators allowed to exit per epoch, or approximately every 6.4 minutes [1]. As a result, the full impact of the current unstaking wave is unlikely to be felt in the immediate term.

While the outflows and unstaking activity have raised concerns about short-term volatility, the broader Ethereum market remains fundamentally supported by growing institutional adoption and ETF inflows. The continued inflows into Ethereum ETFs and the increasing dominance of institutional investors over decentralized staking protocols suggest a long-term shift in market dynamics [1]. As the unstaking process unfolds, the focus will remain on how effectively the market can absorb the resulting ETH liquidity and whether the ETF-driven demand can offset potential selling pressure.

Source:

[1] Ethereum's unstaking scale hits a new high, what is the risk ... (https://www.chaincatcher.com/en/article/2198436)

[2] Ethereum ETFs Take Center Stage With Record $11B ... (https://www.ccn.com/news/crypto/ethereum-investments-11b-historical-inflows/)

[3] Spot Ether ETFs See $197M Outflows, Second-Largest Ever (https://cointelegraph.com/news/ether-etfs-197m-outflows-second-largest)