Ethereum spot ETFs have endured their sharpest weekly redemptions since launch, with $796 million exiting these funds in just five days. Data from Farside and SoSoValue confirmed the record outflows, which pushed ETH prices down nearly 10% to test the $4,000 mark.
Fidelity’s FETH and BlackRock’s ETHA were among the most brutal hits, shedding $362 million and $200 million, respectively.
The total assets of Ethereum ETFs fell to $27.5 billion, representing just over 5% of the network’s overall market capitalization. Outflows were concentrated in major funds, with some posting hundreds of millions in weekly redemptions. Despite the sell-off, Ethereum’s spot trading volumes remained strong, surpassing $46 billion, indicating that investors were shifting their exposure from ETFs back to direct holdings.
Crypto analyst Bitbull noted that the rapid “panic selling” and withdrawals are a sign of capitulation. He further warned that sustained selling could pull Ether toward the $3,750 support zone if ETF flows fail to stabilize.
Flight Toward Bitcoin and Shifting Market Dynamics
While Ethereum ETFs experienced significant withdrawals, Bitcoin ETFs recorded inflows of nearly $284 million during the same week. The divergence highlighted investor preference for Bitcoin as a relatively safe haven. In a recent podcast, ETF analyst James Seyffart described the Spot Bitcoin ETF as the biggest launch of all time.
Ethereum’s underperformance contrasted with Bitcoin’s resilience, despite the broader crypto market also experiencing turbulence. The uneven demand underscores a split in institutional allegiances, with Ethereum increasingly viewed as a higher-beta play compared to Bitcoin.
Even so, long-term demand for Ethereum exposure remains intact. Since their mid-2024 launch, Ether ETFs have attracted more than $13 billion in net inflows. The latest setback, analysts suggest, reflects short-term portfolio rebalancing rather than outright rejection of Ethereum’s prospects.
Analysts Highlight Accumulation Despite Redemptions
On-chain metrics revealed that some investors directly accumulated Ether on the blockchain, while ETFs experienced significant outflows. This suggests a reallocation rather than a wholesale exit from Ethereum markets. Historical patterns indicate that when ETF redemptions peak, a period of stabilization often follows, provided on-chain accumulation continues.
Analysts also pointed to regulatory developments as a potential catalyst. Expectations that U.S. authorities may eventually permit staking within ETFs could reignite demand for Ether-linked products. If staking becomes part of the ETF structure, it could transform yield dynamics and strengthen Ethereum’s competitive edge.
For now, the market remains cautious, with $3,750 identified as the next critical support. Should Ether hold above that threshold, analysts believe renewed inflows could emerge as investor confidence stabilizes. In the meantime, ETH is changing hands at $4,104, reflecting a 3.5% surge over the past 24 hours.
Evans Kelvin
