Ethereum ETFs See $103M Outflow as Bitcoin ETFs Gain $744M
1min read Last week, Ethereum ETFs experienced a significant net outflow of $103 million, marking a notable shift in investor sentiment. This outflow was predominantly driven by BlackRock’s Ethereum ETF (ETHA), which saw the largest weekly net outflow of $74 million. In contrast, Bitcoin ETFs continued to attract substantial institutional investment, with a total weekly net inflow of $744 million. BlackRock’s Bitcoin ETF (IBIT) led the inflows with $538 million, highlighting the growing institutional appetite for Bitcoin.
The divergence in performance between Ethereum and Bitcoin ETFs is stark. While Ethereum ETFs struggled with outflows, Bitcoin ETFs managed assets worth $94.35 billion as of March 22, representing about 5.65% of Bitcoin’s total market cap. This trend suggests that institutional investors are increasingly favoring Bitcoin over Ethereum, possibly due to Bitcoin’s narrative of scarcity and its status as digital gold. Ethereum, on the other hand, faces skepticism due to its transition to Proof-of-Stake and concerns about centralization.
The total asset value of all Ethereum spot ETFs stands at $6.77 billion, accounting for 2.84% of the total market capitalization of Ethereum. The historical cumulative inflows for Ethereum ETFs amount to $2.42 billion, indicating a significant gap compared to the inflows seen by Bitcoin ETFs. The recent outflows from Ethereum ETFs, particularly from BlackRock’s ETHA, raise questions about investor confidence in Ethereum. Despite these challenges, Ethereum ETFs continue to play a role in the broader crypto market, with ETHE recording a slight weekly net inflow of $2.87 million.
Ask Aime: Why do Ethereum ETFs experience a significant net outflow, while Bitcoin ETFs continue to attract substantial institutions?
The institutional demand for Bitcoin has been a key driver of its success. New investors have purchased more than 172,705 BTC since February 23, 2023, indicating a resurgence in interest following the FTX crash in 2022. Potential inflows from sources like US pension funds and Target Date Funds (TDFs) could provide additional liquidity to the US equity market. If even a small portion of these funds is allocated to Bitcoin and other cryptocurrencies, it could have a significant impact on the market. While there is a possibility that some of these inflows could eventually find their way into the Ethereum market, the current trend favors Bitcoin.
The recent performance of Ethereum ETFs highlights the challenges faced by the asset in attracting institutional investment. Despite its technological advancements and potential use cases, Ethereum continues to lag behind Bitcoin in terms of ETF inflows. The transition to Proof-of-Stake and concerns about centralization may be contributing factors to this trend. However, the crypto market is dynamic, and investor sentiment can change rapidly. As the market evolves, it will be interesting to see how Ethereum ETFs adapt and whether they can regain investor confidence.
