Spot Bitcoin and Ethereum exchange-traded funds (ETFs) in the United States experienced a significant downturn last week, with a staggering loss exceeding $1.7 billion in net withdrawals. This dramatic shift occurred amid notable price volatility in both cryptocurrencies, as Bitcoin and Ethereum each plummeted more than 8% during the same period.
Data from SoSoValue indicates that Bitcoin ETFs alone suffered net withdrawals amounting to $903 million, marking the end of a month-long trend of inflows that had been buoyed by increased institutional confidence in these assets. However, shifting macroeconomic conditions led to a change in sentiment, prompting many institutional investors to reassess their positions and adopt a more defensive approach.
The downturn in Ethereum products was even more pronounced, with the nine US-listed spot Ethereum ETFs experiencing their largest weekly withdrawal since their inception. The total outflows reached $796 million, further underscoring the cooling demand for crypto ETFs.
This synchronized retreat across both Bitcoin and Ethereum reflects a broader decline in interest surrounding cryptocurrency ETFs. Once viewed as a convenient way for institutional investors to access digital assets, these products are now being scrutinized as market conditions change. Heightened macroeconomic uncertainty—characterized by persistent inflation concerns, slowing global growth, and ambiguous US monetary policy—has made volatile assets less attractive to investors.
As institutional strategies evolve, many are opting for a defensive stance, particularly as they navigate increasing exposure to losses. Moreover, data from CryptoQuant reveals that Bitcoin treasury firms seeking to raise capital through private investment in public equity (PIPE) deals are facing pressure, as share prices trend towards discounted issuance levels.
At the same time, there is a noticeable shift in investor focus towards newly launched ETFs linked to alternative cryptocurrencies, such as Solana and XRP. These emerging products have begun to attract capital that might have otherwise flowed into Bitcoin and Ethereum, suggesting an appetite for diversity within the crypto space. While risk sentiment may have cooled, the interest in exploring a wider array of digital assets remains, albeit in a more calculated and selective manner.
