Spot ether exchange-traded funds (ETFs) experienced a significant downturn this week, marking the fifth straight day of net outflows totaling $952 million. The sharpest decline occurred on Friday, when $446.71 million was redeemed. In contrast, spot bitcoin ETFs saw $246.4 million in net inflows over the same period.
The outflow wave follows a record-setting August, during which spot ether ETFs attracted $3.87 billion, while bitcoin ETFs faced $751.1 million in withdrawals. Data from SoSoValue indicates that institutional investors had heavily favored ether in late summer, drawn by clarity provided by the GENIUS Act, which imposed restrictions on stablecoin issuer interest payments and aimed to standardize stablecoin regulation.
Despite the outflows, ether’s market performance remained resilient. The cryptocurrency climbed over 16% in the past month, trading just below $4,300 at the time of writing. The price uptick reflects broader market dynamics, including on-chain demand driven by decentralized finance (DeFi) protocols and renewed staking interest following Ethereum network upgrades.
Analysts attribute the current fund rotations to looming recession fears, intensified by weaker-than-expected U.S. labor market data. Investors recalibrated portfolios ahead of the Federal Reserve’s upcoming policy meeting, where rate cut bets have surged. The CME FedWatch tool shows an 89% probability of a 25 basis point cut and an 11% chance of a 50 basis point cut at the September meeting.
Market participants are now closely monitoring upcoming U.S. consumer price index (CPI) data, which could further influence ETF flows and trading sentiment. Wells Fargo forecasts a 0.3% month-over-month increase in core CPI, potentially testing market tolerance for inflation persistence. Ether’s historical performance during rate-cut cycles suggests that a confluence of macroeconomic relief and DeFi expansion may ultimately support a renewed inflow trend, though short-term volatility remains elevated.
Going forward, fund managers and crypto investors will assess how shifting monetary policy, regulatory developments, and on-chain metrics interact to shape ETF demand. As the crypto market matures, the balance between ETF flows and decentralized network growth will likely inform both price trajectories and institutional adoption patterns in the coming months.
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