Ethereum ETFs Experience $103M Outflow as Bitcoin Sees Massive Inflows

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Key Takeaways:

Last week, Ethereum ETFs saw a net outflow of $103 million.
BlackRock’s ETHA ETF saw the largest outflows, a stark contrast to its success with Bitcoin.
Interest in Bitcoin ETFs has continued to drive strong institutional investment, widening the gap between Bitcoin and Ethereum ETFs.

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Bitcoin ETF Prices Hit All-Time Highs While Ethereum ETFs Struggle

Last week showed a divergence in performance for crypto ETFs; Ethereum ETFs recorded a net outflow of $103 million (March 17 – March 21). This number comes in stark contrast to the ongoing success enjoyed by Bitcoin ETFs, according to data from SoSoValue. As Bitcoin ETFs are riding a wave of institutional interest, the same is not the case with Ethereum.

The numbers paint a picture of changes in investor mood. The biggest weekly net outflow experienced by the Ethereum ETF was that of BlackRock’s Ethereum ETF (ETHA), which reported a net outflow of $74 million. According to SoSoValue, ETHE recorded a slight weekly net inflow of $2.87 million. However, its aggregate outflow remains significantly higher at $4.17 billion. In the meantime, the net total asset value of all Ethereum spot ETFs stands at 6.77 billion dollars, accounting for 2.84% of the total market capitalization of Ethereum. The total historical cumulative inflows amount to $2.42 billion.

BlackRock Tops Bitcoin ETF Inflows as Ethereum Retreats

The performance of Bitcoin ETFs stands in stark contrast to that of Ethereum ETFs. Over the same time frame, Bitcoin ETFs saw a total weekly net inflow of $744 million. Topping the new money list was BlackRock’s Bitcoin ETF (IBIT) with $538 million net inflows. As of March 22, Bitcoin ETFs collectively managed assets worth $94.35 billion—representing about 5.65% of Bitcoin’s $1.667 trillion total market cap, with BlackRock’s IBIT leading inflows for six consecutive trading sessions.

The difference is especially stark when looking at daily numbers. On March 21 alone, IBIT accumulated nearly $105 million, making the largest contribution to a staggering trading volume of $1.3 billion on that date. In just the last six days, Bitcoin ETFs attracted more than $785 million collectively. Farside Investors reported that IBIT accumulated more than $486 million, while Fidelity’s FBTC received inflows of $70 million, and Ark Invest’s ARKB received a little over $100 million.

What’s Behind the Divergence? Institutional Appetite for Bitcoin Rises

While increasing institutional demand seems to be the main reason for the ETF’s success, demand for Bitcoin is at its highest since before the crash of FTX in 2022. As per reports, new investors are said to have purchased more than 172,705 BTC since Feb 23 this year, sparked interest in the crypto.

Even more significant could be potential inflows from sources like US pension funds and Target Date Funds (TDFs). They could provide $103 to $122 billion of liquidity to the US equity market. If even a small portion (5-10%, or around $1-2 billion) is allocated to Bitcoin and other cryptocurrencies, it could have a significant impact. Although there is a chance that such inflows would eventually find their way into the Ethereum market, they currently appear to be propping up Bitcoin.

The recent activity surrounding Ethereum ETFs, such as the large outflow from BlackRock’s ETHA, raises the question: Are investors losing confidence? Bitcoin has the tailwind of a story of scarcity and digital gold, while Ethereum is sometimes viewed more skeptically due to its transition to Proof-of-Stake and questions of centralization.

The trend isn’t uniformly bad. ETHE from Grayscale experienced modest inflows. But, even then, U.S. spot ether ETFs saw outflows of roughly $18.63 million on Friday. According to analysts, the outflows were due to Blackrock’s ETHA and Grayscale’s ETH Mini Trust, which suffered losses of $11.94 million and $6.69 million, respectively. This demonstrates how volatile and unpredictable the crypto market is, and how quickly sentiment can shift. Bitcoin and Ethereum ETFs’ performance remains worlds apart, highlighting different variables in crypto investment decisions.