Bitcoin and Ethereum ETFs Face $1.7B Outflows as Market Volatility Grows

Spot Bitcoin and Ethereum exchange-traded funds (ETFs) in the United States saw a sharp reversal last week, recording over $1.7 billion in net outflows. The downturn came as both cryptocurrencies endured price declines of more than 8% during the reporting period, sparking a wave of redemptions from institutional investors.

According to data from SoSoValue, spot Bitcoin ETFs lost $903 million in net withdrawals. This marked the end of a month-long streak of inflows that had previously reflected growing institutional demand for Bitcoin exposure. However, sentiment shifted as global economic uncertainty deepened, prompting investors to trim risk and adopt a more defensive stance.

Ethereum ETFs faced even steeper challenges. The nine US-listed spot Ethereum ETFs recorded $796 million in redemptions, the largest weekly outflow since their launch earlier this year. The synchronized retreat highlights a broader cooling in crypto ETF demand, as market participants reassess strategies in light of macroeconomic headwinds.

The sell-off was driven by concerns over persistent inflation, slowing global growth, and uncertainty around US monetary policy, factors that have reduced appetite for high-risk assets like cryptocurrencies. As a result, many institutional allocators who once viewed spot crypto ETFs as an accessible entry point are now scaling back exposure.

At the same time, newly launched ETFs tied to Solana and XRP have started to attract fresh investor interest. These products are drawing capital away from traditional Bitcoin and Ethereum funds, signaling a shift toward diversification within digital asset portfolios. While risk sentiment has cooled, demand for crypto exposure remains selective, with investors exploring opportunities beyond the two largest cryptocurrencies.

Meanwhile, CryptoQuant data suggests that Bitcoin treasury firms raising capital through PIPE deals are facing additional pressure as share prices move toward discounted issuance levels, underscoring broader stress in crypto capital markets.

In the current climate, Bitcoin and Ethereum remain central to digital asset investing, but growing competition from alternative token ETFs reflects an evolving landscape where investors are cautious, defensive, yet still open to diversification opportunities.