Spot Ethereum (ETH) exchange-traded funds (ETFs) surpassed $1 billion in cumulative outflows following six consecutive days of institutional withdrawals, according to Farside Investors data through September 8. The sustained pressure caused the Ethereum ETF to fall below the $13 billion mark in net cumulative inflows. At the same time, Bitcoin (BTC) ETF moved in the opposite direction, starting the week with $364.3 million in inflows and reaching a total of $614.6 million in positive net flows for September.
Bitfinex Alpha’s September 8 report attributed the cooling institutional demand to market dependence on fresh catalysts. It noted stronger spot conviction for Bitcoin compared to Ethereum’s mixed directional flows and arbitrage activity. The analysis suggested that institutional hesitancy at elevated price levels contributed to reduced commitment. For the Bitcoin ETF, inflows far exceeded shifts in futures positioning, indicating traditional finance (TradFi) investors primarily expressed demand through direct spot exposure.
Ethereum presented a more complex dynamic, with bi-weekly changes in CME open interest accounting for more than 50% of cumulative ETF inflows. This pattern revealed that significant TradFi activity in Ethereum combined spot allocations with cash-and-carry strategies, blending directional positioning with market-neutral arbitrage. As a result, Bitcoin flows reflected clearer directional conviction, while Ethereum flows highlighted balanced speculative demand and structured arbitrage participation.
The reversal on September 9 drew attention from analysts, with Bitcoin ETFs posting a modest $23 million in net inflows while Ethereum ETFs brought in $44 million, ending the six-day outflow streak. BlackRock’s iShares Bitcoin Trust (IBIT) was the sole vehicle to post positive flows for Bitcoin, while BlackRock’s ETHA product captured the vast majority of Ethereum inflows.
The report emphasized that institutional confidence extended beyond the two largest cryptocurrencies, such as Solana (SOL). SOL Strategies listed on September 9 on Nasdaq under ticker STKE, marking a milestone for the Solana-focused firm that surpassed CAD $1 Billion in delegated assets and held nearly 400,000 SOL in treasury.
Bloomberg senior ETF analyst Eric Balchunas noted on September 9 that the “memecoin ETF era” appeared ready to launch, with DOJE slated for a Sept. 11 debut under the 40 Act. He characterized it as potentially the first US ETF designed to hold assets with no intended utility. A substantial group of ’33 Act ETF applications remained pending SEC approval, suggesting broader altcoin ETF adoption could drive institutional capital rotation.
Altcoin dominance rose by 0.3% in September, worth approximately $12 billion, with the crypto market cap reaching $4 trillion as of September 9. This rotation may explain the outflows from Ethereum ETFs as institutional investors position themselves for upcoming altcoin product launches.