US Spot Ethereum ETFs Face $79M Outflows, Largest Since July

Grayscale Spot Ethereum ETF Sees Massive Withdrawals Amid Waning Investor Interest

The Grayscale spot Ethereum ETF (ETHE) has recently experienced over $80.8 million in withdrawals, showcasing a concerning lack of institutional and investor interest. While Bitcoin ETFs are witnessing renewed enthusiasm, Ethereum appears to be struggling to attract the same level of institutional liquidity.

Highlights

• Bitcoin ETFs are seeing growing interest, while Ethereum struggles to capture institutional liquidity.
• Spot Ethereum ETFs have witnessed total outflows of $686 million since July, despite recent price recoveries.
• Investor sentiment around Ethereum has been negatively impacted by selloffs from the Ethereum Foundation and co-founder Vitalik Buterin.

Declining Interest in Spot Ethereum ETFs

In contrast to the growing demand for spot Bitcoin ETFs in the United States, spot Ethereum ETFs have seen waning interest in recent times. On Monday, these Ether ETFs recorded the largest single outflows of $79 million since their launch in July. This trend highlights that Ethereum-based investment products have struggled to attract significant investment participation and institutional attention.

Grayscale Leads Spot Ethereum ETF Outflows

On Monday, the total outflows from the spot Ethereum ETF stood at a staggering $79.3 million, the largest since July 2023. Grayscale’s ETHE was the major contributor, with more than $80.8 million in outflows. Among the other market players, only the Bitwise Ether ETF (ETHW) saw minimal inflows of $1.3 million, while all other Ether ETFs recorded zero inflows that day.

Recent trends indicate a significant slowdown in inflows to U.S. spot Ethereum ETFs. Over the past eight trading sessions, five of the eight listed Ether ETFs have recorded zero inflows. Even major players like BlackRock have struggled to achieve daily inflows exceeding $10 million. Since the launch of spot Ethereum ETFs, total outflows have surged to $686 million, according to data from Farside Investors.

Ethereum Price Recovery Fails to Stem Outflows

This development comes despite Ethereum’s recent price recovery. On the weekly chart, ETH has seen a 15% price increase, trading at $2,653.08 as of press time. However, Ethereum has been losing ground against Bitcoin, with the ETH/BTC ratio dropping to its lowest level since April 2021.

Reasons Behind Waning ETH Interest

Unlike Bitcoin, Ethereum—though the world’s second-largest cryptocurrency—does not enjoy the same reputation as “digital gold.” Consequently, institutional liquidity tends to flow into Bitcoin (BTC) first before reaching Ethereum (ETH). The significant outflows from spot Ethereum ETFs indicate that institutional investors are moving funds out of Ethereum.

Additionally, recent selloffs by the Ethereum Foundation and Vitalik Buterin have dampened investor sentiment. So far this year, the Ethereum Foundation has sold over 3,500 ETH, further contributing to concerns surrounding the cryptocurrency.

Moreover, the Ethereum exchange supply has been steadily increasing, now exceeding 21.46 million coins. This rise in exchange supply has heightened the risk of potential selling pressure in the near future.