Ether ETFs experience $197M in outflows on Monday, marking the second largest ever

Spot Ether Funds Experience Significant Outflow

This week kicked off with a substantial sell-off in Spot Ether (ETH) Exchange-Traded Funds (ETFs), totaling nearly $200 million on Monday, extending a trend that began the previous week.

On Monday, these funds recorded a significant outflow of $199.7 million, which is notable as the second-largest daily outflow since their inception, only trailing behind an $465 million outflow witnessed on August 4th.

The latest outflow came on the heels of a $59 million drop on Friday, making for a combined two-day total of $256 million. Still, this amount seems rather modest compared to an astounding $3.7 billion inflow seen over the last eight days, where individual inflows occasionally surpassed the $1 billion mark.

BlackRock’s Etha Sees Major Outflow

According to recent data, BlackRock and Fidelity faced the most significant outflows among ETH ETF providers on Monday, with losses of $87 million and $79 million, respectively.

On Friday, Fidelity’s Ethereum Fund (FETH) accounted for $272 million of outflows, contributing largely to the overall $59 million loss reported that day.

BlackRock has emerged as one of the largest institutional holders of Ether. Data indicates that the Ishares Ethereum Trust ETF (ETHA) held around 3.6 million ETH, valued at approximately $15.8 billion as of last Friday. However, the dollar value of ETHA’s holdings has since dipped by 1.5% to around $15.6 billion as reported on Monday.

In that timeframe, ETH prices have decreased by about 6.5%, based on estimates from CoinGecko.

Ether Unstaking Reaches New Heights

The rise in ether ETF outflows and fluctuating ETH prices coincides with a surge in ether unstaking queues—essentially, the amount of ETH pending withdrawal from staking pools monitored by Ethereum validators.

A recent report highlighted that the exit queue for validators reached an all-time high of 910,000 ETH, valued at roughly $3.9 billion. This data was tracked on a third-party site called ValidatorQueue, which keeps tabs on the Ethereum Proof-of-Stake (PoS) network.

There is an expectation that those looking to withdraw their ETH might face a wait of at least 15 days and 14 hours.

Some observers in the crypto space are raising concerns about the long queues, suggesting they could pose challenges for the market. One Bitcoin advocate noted that while a drastic shift seems unlikely, the situation is dynamic.

He also remarked that ETH prices tied to Bitcoin could regress to “below 0.03,” while as of this writing, Ether was trading at about 0.036 BTC.

Ether ETFs Outperform Bitcoin ETFs

Recent weeks have shown Spot Ether ETFs outperforming Bitcoin ETFs concerning inflows, indicating a growing interest from investors in ETH over BTC.

The ratio of Bitcoin supply held in ETFs stood at 6.4% as of Monday, compared to 5% for Ether ETFs, according to data shared by an analyst at Dragonfly.