Crypto Bloodbath: Ethereum and Bitcoin ETFs Bleed $1.7B - What’s Spooking Investors Now?

Digital asset markets hit turbulence as ETF outflows accelerate

The Great Unwind

Investors yanked a staggering $1.7 billion from cryptocurrency ETFs this week - the largest withdrawal since the 2022 bear market. Bitcoin and Ethereum products bore the brunt of the selling pressure, reversing months of steady inflows that had pushed digital assets to new highs.

Fear Grips the Market

Regulatory uncertainty combined with macroeconomic pressures created the perfect storm. Treasury yield spikes and renewed inflation concerns sent traditional and crypto markets tumbling simultaneously. The correlation everyone hoped had broken? Still very much intact.

Institutional Cold Feet

Wall Street's crypto darling suddenly looks less appealing when rate cuts disappear from the horizon. The 'digital gold' narrative cracks when the real thing starts shining brighter. Funny how quickly institutional conviction evaporates when quarterly bonuses are on the line.

This pullback either represents a healthy correction or the beginning of something more concerning - the market hasn't decided yet. But one thing's certain: when crypto ETFs bleed, they don't do it quietly.

Key Takeaways

Which Bitcoin ETFs saw the biggest withdrawals?

Fidelity’s FBTC led with $330.4 million in outflows, followed by Ark 21Shares’ ARKB. Even BlackRock’s IBIT, a usually strong performer, wasn’t spared, shedding $37.3 million.

How did Ethereum ETFs perform?

They faced $795.6M redemptions. Fidelity’s FETH led with $362M outflows, while BlackRock’s ETHA saw $199.9M. Only ETHE and TETH gained.

After weeks of strong momentum in the ETF market, the tide has turned.

Spot Bitcoin [BTC] and ethereum [ETH] exchange-traded funds (ETFs) in the U.S. saw a sharp reversal last week, recording over $1.7 billion in combined outflows.

The exodus came as both cryptocurrencies faced heightened volatility, with Bitcoin and Ethereum each sliding more than 8% over the same period.

Bitcoin ETF update

According to data from Farside Investors, U.S.-listed Spot Bitcoin ETFs logged net withdrawals of $903 million last week. This ended a month-long streak of inflows that had signaled rising institutional confidence.

On the 26th of September, Fidelity’s FBTC led the exodus with $330.4 million in redemptions, followed by Ark 21Shares’ ARKB and other funds.

BlackRock’s flagship IBIT, typically regarded as one of the strongest performers, also saw outflows worth $37.3 million, while Bitwise’s BITB shed $23.8 million.

Several other funds reported smaller redemptions, while a few remained flat with no notable flows.

Ethereum ETFs fared no better

On the other hand, for the week ending the 26th of September, nine U.S.-listed spot Ethereum ETFs collectively saw $795.6 million in withdrawals, marking their heaviest week of outflows since their launch.

Fidelity’s FETH once again stood out for recording the largest withdrawals at $362 million, trailed by BlackRock’s ETHA, which saw $199.9 million in redemptions.

Grayscale’s ETHE and 21Shares’ TETH were rare exceptions, posting modest inflows while most other funds stagnated.

Will altcoins act as a savior?

With this shift in investor sentiment, attention is now shifting toward altcoin ETFs, with several final deadlines for approval arriving in October.

Popular analyst Daan crypto Trades even described October as “ETF month,” hinting at a potentially decisive moment for the broader digital asset ETF market.

He said, 

“We’re expected to see approvals on ETFs from a variety of major altcoins like $SOL, $XRP, $LTC & $DOGE.”

Daan Crypto Trades noted that none of the ETF applications with October deadlines come from industry heavyweights like Fidelity or BlackRock, two of the most influential players in the crypto ETF arena.

Still, the pending approvals could inject fresh momentum into the market in the weeks ahead.  Interestingly, this wave of outflows came even as institutional appetite for bitcoin ETFs remained evident.

From inflows to outflows in just a week

Just last week, Spot Bitcoin ETFs recorded $642.4 million in inflows, according to Farside Investors.

The broader landscape has also seen Wall Street deepening its crypto ties, with JPMorgan in June 2025 starting to accept Bitcoin ETF shares as collateral for loans. 

Together, these developments highlight the mixed signals in today’s ETF market: short-term volatility shadowed by long-term institutional integration.