Ethereum and Bitcoin ETFs Face Historic Withdrawal Wave - What’s Driving the Exodus?
Digital asset markets reel as ETF outflows hit unprecedented levels.
The Great Unwinding
Institutional investors are pulling capital from cryptocurrency ETFs at a pace never seen before. The withdrawal patterns suggest a fundamental shift in sentiment among traditional finance players.
Market Mechanics Under Stress
Liquidity providers scramble to meet redemption requests while maintaining market stability. The sheer volume of outflows tests the infrastructure that supports these financial products.
Regulatory Headwinds Mount
Recent policy developments create additional pressure on crypto investment vehicles. Some analysts point to changing compliance requirements as a contributing factor to the exodus.
Wall Street's latest flirtation with crypto appears to be hitting the classic 'buy high, sell low' pattern that made traditional finance so... traditional.
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During the week, spot Ethereum
$4,011 ETFs saw the highest weekly outflow recorded to date. According to SoSoValue data, the week ending September 26 experienced a total withdrawal of $795.6 million from ETFs. During the same period, trading volume exceeded $10 billion and the price of ETH briefly dropped below $4,000.
Record Withdrawals from Ethereum ETFs
The outflows from Ethereum-based spot ETFs reached noteworthy levels. Over $200 million was withdrawn from BlackRock’s ETHA ETF, while Fidelity’s third largest ETF, FETH, saw an outflow exceeding $362 million. The busiest days of the week for these movements were Thursday and Friday. With the ETH coin’s price falling below $4,000, approximately $250 million was withdrawn daily.
The total weekly withdrawal from Ethereum ETFs reached $795.6 million. This surpassed the previous record of $787.7 million set on September 5. Despite the outflows, BlackRock’s ETHA continues to be the largest ETF in the sector, with asset size exceeding $15.2 billion.
Towards the weekend, ETH’s price recovered, returning to the $4,020 level. The second-largest cryptocurrency in the market maintains its position above $4,000 for now.
Bitcoin ETFs Also Face Withdrawals
Not only Ethereum ETFs but also Bitcoin
$109,422 ETFs saw significant withdrawals during the same period. The weekly total outflow from spot Bitcoin ETFs rose to $902.5 million. Notably, Friday alone recorded an outflow of $418.3 million.
Performance variations among the ETFs became apparent. On Friday, a withdrawal of $37.3 million occurred solely from BlackRock’s IBIT ETF, whereas Fidelity’s FBTC ETF saw an outflow exceeding $300 million on the same day.
In examining long-term trends, BlackRock’s IBIT ETF continues to increase its market share. The ETF, which at times controls over 80% of the total bitcoin ETF market, experienced lesser outflows compared to its competitors.
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