The Ethereum Exchange-Traded Funds (ETFs) experienced an unprecedented weekly outflow, totaling nearly $800 million as the cryptocurrency markets faced a downturn last week.
Key Highlights:
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The Spot Ethereum ETF saw a record outflow of $795.6 million, primarily driven by significant withdrawals linked to Fidelity.
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The price of Ethereum dipped below $4,000 briefly, leading to the worst two-day drop since mid-August.
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While BlackRock’s IBIT maintained its dominant market share, the Bitcoin ETF also reported a significant outflow of $905 million.
According to data from SoSovalue, the Spot Ethereum ETFs recorded net outflows of $795.6 million for the week ending September 26. This exceeded the previous record of $787.77 million set earlier this month. The outflow coincided with trading volumes that surpassed $10 billion across the board.
The largest withdrawals were associated with BlackRock’s flagship fund and Fidelity’s offerings. Etha, the top Ethereum ETF in terms of managed assets, lost over $200 million but still holds more than $15.2 billion in total assets. Meanwhile, Feth had a particularly challenging week, suffering over $362 million in outflows.
Following the drop below the $4,000 mark on Thursday and Friday, the Ethereum Fund faced redemptions of about $250 million, marking the most significant two-day slide since mid-August. Analysts attribute the decline to various factors, including technical pressures, broader economic uncertainty, and liquidations of leveraged positions.
Ethereum managed a slight recovery, trading close to $4,020 by Saturday. In related developments, the Bitcoin ETF saw a major outflow, with a total of $902.5 million withdrawn that week; Friday alone witnessed a withdrawal of $418.3 million, marking the highest daily outflow in over a month.
Notably, BlackRock’s IBIT fund handled the turbulence better than competitors; it lost just $37.3 million on Friday, while Fidelity’s FBTC experienced more than $300 million in outflows in a single day. Despite the volatility, BlackRock’s Bitcoin products seem to be gaining traction.
Data indicates that IBIT holds 80% of the market share among Spot Bitcoin ETFs. Interestingly, BlackRock has yet to apply for a Spot Solana ETF, unlike several prominent asset managers such as Fidelity, Franklin Templeton, and Bitwise, who have recently updated their S-1 filings for the product.
ETF analyst Nate Geraci believes that the U.S. SEC could approve these filings by mid-October, seeing this month as crucial for digital asset products.
In the backdrop, the Rex-Soprey Solana Staking ETF launched at the CBOE BZX Exchange, witnessing $12 million in inflows on its first day. Some analysts foresee Solana becoming the next favored altcoin in institutional settings, with notable interest also reported in a European-based Solana ETP.
Geraci and others hint that incorporating staking language in these filings might pave the way for a highly anticipated Spot Ethereum ETF with staking capabilities.
As it stands, Bitcoin exchange-traded products collectively hold over 1.47 million BTC, which is about 7% of the total supply, with U.S.-based ETFs dominating in this space. According to data from HODL15CAPITAL, BlackRock’s IBIT leads with 746,810 BTC, followed by Fidelity’s FBTC, which holds around 199,500 BTC.
