#Ethereum ETFs Face $788M Outflow Amid Recession Fears, Bitcoin ETFs Gain Traction

Ethereum ETFs Hit by $788M Outflow as Investors Pivot to Bitcoin

The cryptocurrency market is witnessing a significant shift in institutional sentiment, with U.S. spot Ethereum exchange-traded funds (ETFs) experiencing a sharp outflow of $787.6 million over four consecutive days from September 2 to September 5, 2025. This marks one of the most substantial capital flights since Ethereum ETFs launched, driven by a combination of staking restrictions, macroeconomic uncertainty, and a risk-off sentiment among investors. In stark contrast, Bitcoin ETFs have recorded net inflows of $250.3 million during the same period, highlighting a divergence in investor preference amid market turbulence. As Ethereum trades at $4,304, down 3.3% over the past week, and Bitcoin holds steady at $111,811, up 2.1%, the dynamics of institutional capital allocation are reshaping the crypto landscape.

Breaking Down the Ethereum #ETF Exodus

The recent outflow from Ethereum ETFs represents a dramatic reversal from August 2025, when these funds attracted a robust $3.87 billion in inflows, dominating institutional crypto investments. The most significant single-day withdrawal occurred on September 5, with $446.8 million exiting the market, led by Grayscale’s ETHE, which saw $309.9 million in outflows. Fidelity’s FETH followed closely, losing $216.7 million on September 4. BlackRock’s ETHA exhibited mixed performance, recording $148.8 million in inflows on September 4 before reversing to $309.9 million in outflows the next day.

Analysts attribute this retreat to a combination of structural and macroeconomic factors. Unlike Bitcoin ETFs, U.S. Ethereum ETF products are prohibited from staking their holdings, reducing their appeal during periods of low risk appetite. Ethereum’s reputation as a “higher-beta” asset—more volatile and sensitive to market swings—makes it a prime target for profit-taking when investor confidence wanes...

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