TLDR
- Ethereum ETFs saw $446.7M in outflows on Sept. 5, the second-largest single-day drop on record.
- BlackRock’s ETHA fund led redemptions with $309.9M withdrawn in one day.
- ETH traded near $4,300, down from a monthly high of $4,900.
- Total trading volume in Ethereum ETFs hit $2.79B despite the outflows.
Ethereum spot exchange-traded funds (ETFs) saw net outflows of $446.7 million on September 5. This marked the second-largest daily withdrawal since the launch of Ethereum ETFs. The pullback came as broader weakness in the cryptocurrency market pressured digital assets and investor sentiment.
Trading activity surged to $2.79 billion across Ethereum ETFs during the day. This shows that investors were adjusting positions rather than completely exiting the market. ETH was trading near $4,300, down from a monthly high of around $4,900.
BlackRock Leads Withdrawals Across Major Ethereum ETFs
BlackRock’s Ethereum ETF led the sell-off with $309.9 million in outflows. This accounted for nearly 70% of the total redemptions. Grayscale and Fidelity also recorded withdrawals of $51.7 million and $37.7 million, respectively.
Smaller funds such as 21Shares’ TETH and Grayscale’s ETH saw lesser redemptions, but they contributed to the total daily pullback. These outflows come after Ethereum ETFs recorded a strong performance in August, with $3.87 billion in net inflows.
By the end of August, a $164 million single-day outflow on the 29th had already ended a six-day inflow streak. That move pointed to rising profit-taking activity. The recent $447 million pullback shows that investors may be continuing to take profits as volatility returns.
Institutional Risk Repositioning Signals Market Caution
The sharp drawdown in Ethereum ETFs comes as institutional investors adjust their crypto exposure. Bitcoin ETFs also recorded $160 million in outflows on the same day. This suggests the market retreat is not limited to Ethereum alone.
Market analysts say the high redemption volumes may be part of broader portfolio realignments due to price fluctuations. On August 4, BlackRock moved $372 million in ETH and $292 million in BTC to Coinbase during a similar round of redemptions. That pattern appears to be repeating in early September.
Total assets under management for Ethereum ETFs now stand at $27.64 billion. Ethereum ETFs currently make up 5.3% of the overall ETH market cap. Despite the outflows, strong trading volumes show that investor interest remains active, though more cautious.
Crypto analyst Ted Pillows stated on social media that, “If outflow pressure stays high, inflows may return once the rotation finishes.” The comment reflects expectations that institutional flows could recover if price volatility settles.
Market Rotation Continues Despite Heavy Withdrawals
Though Ethereum ETFs faced high redemptions, trading activity remained strong. The $2.79 billion in ETF trading volume shows that capital is being moved, not removed. Some investors may be reallocating funds within crypto or shifting to other asset classes.
The recent ETF redemptions follow a month of gains and rising interest in crypto assets. August saw rising inflows across Bitcoin and Ethereum ETFs, but that trend reversed toward the end of the month.
With both Bitcoin and Ethereum ETFs showing large outflows, institutions seem to be taking a wait-and-see approach. Concerns over short-term price direction and macro uncertainty may be influencing portfolio decisions.
Ethereum’s price performance in the coming days may determine whether inflows resume. For now, ETF data shows that many investors are pulling back and managing exposure as markets adjust.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
