Crypto Funds See Nearly $1B in Outflows as Bitcoin and Ether ETFs Face Pressure

Bitcoin and Ether ETFs Face Heavy Withdrawals

Cryptocurrency investment funds extended their losing streak this week, with both Bitcoin (BTC) and Ether (ETH) ETFs registering significant outflows. On Tuesday alone, the two largest crypto assets saw combined withdrawals of $945 million, bringing three-day outflows to $1.3 billion, according to data from Farside Investors.

• Spot Bitcoin ETFs recorded $523 million in outflows — more than four times Monday’s losses.

• Ether ETFs doubled their withdrawals to $422 million, up from $200 million the day before.

These redemptions coincided with sharp price corrections. Since last Wednesday, Bitcoin has dropped 8.3% to around $113,896, while Ether has fallen 10.8% to $4,228, per CoinGecko.

Fidelity and Grayscale Lead the Outflows

Among issuers, Fidelity Investments bore the heaviest withdrawals, with its:

• Wise Origin Bitcoin Fund (FBTC) losing $247 million, and

• Fidelity Ethereum Fund (FETH) shedding $156 million.

Combined, Fidelity’s ETFs saw $403 million in daily outflows.

Daily Bitcoin and Ether ETF flows since Aug. 13. Source: Farside.co.uk

Related: Crypto Funds See $223M Outflow as Fed Rate Comments Snap 15-Week Inflow Streak

Grayscale Investments also faced redemptions:

• GBTC (Grayscale Bitcoin Trust ETF) lost $116 million, while

• ETHE (Grayscale Ethereum Trust) recorded $122 million in outflows.

In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) posted no outflows, and its iShares Ethereum Trust (ETHA) saw only a minor $6 million withdrawn, underscoring a divergence in investor sentiment across issuers.

Investor Sentiment Turns to “Fear”

The persistent ETF outflows reflect cooling sentiment across crypto markets. The Crypto Fear & Greed Index slipped into the “Fear” zone on Wednesday with a score of 44, following weeks of bullish optimism.

However, analysts caution against reading too much into short-term movements.

“A few daily ETF outflows doesn’t mean TradFi is abandoning crypto. This just shows people are using ETFs as an easy on-ramp and off-ramp,” said Ryan Park, adviser at 21Rates, in a post on X.

The Crypto Fear & Greed Index flipped to “Fear” on Wednesday after a month of “Greed.” Source: Alternative.me

Ether ETFs Gaining Ground on Bitcoin

Despite the downturn, some analysts note a shifting dynamic between Bitcoin and Ether ETFs. Eric Balchunas, senior ETF analyst at Bloomberg, pointed out that Ether ETFs outpaced Bitcoin ETFs in July inflows, positioning Bitcoin as the “second-best” crypto asset in terms of institutional flows.

Balchunas credited the momentum to stablecoin legislation and the emergence of BitMine, a new firm positioning itself as the “MicroStrategy of Ether.” The company appointed Fundstrat’s Thomas Lee to lead its ETH treasury strategy in June, signaling a potential institutional pivot toward Ethereum.

Conclusion: Short-Term Pain, Long-Term Trend?

The latest outflows mark one of the sharpest pullbacks for Bitcoin and Ether ETFs this year. While Fidelity and Grayscale faced the largest redemptions, BlackRock’s resilience suggests investor confidence remains uneven across issuers.

With prices under pressure and sentiment cooling, markets may see continued volatility in the near term. However, growing institutional interest in Ether — coupled with long-term ETF adoption — could reshape the balance of flows between Bitcoin and Ethereum in the months ahead.

Related: Taxing Bitcoin Doesn’t Make Sense, Says Fund Manager Bill Miller IV