Ethereum exchange-traded funds (ETFs) have seen their biggest outflows in two years as the U.S. Securities and Exchange Commission continues to delay approving spot ETF trading.
According to CoinShares’ latest Digital Asset Funds report, these outflows have resulted in $30 million in outflows from global cryptocurrency-related investment products for the third week in a row.
But James Butterfill, head of research at Coinshares, noted that last week’s modest moves “show that outflows have slowed down considerably.”
Meanwhile, negative sentiment had little effect on trading volumes in these products, which rose 43% to $6.2 billion per week, but still significantly below the weekly average of $14.2 billion.
Ethereum records largest outflow in 2 years
Ethereum outflows reached $61 million last week, the highest level since August 2022. Over the past two weeks, ETH outflows totaled $119 million, making it the worst performing asset on the index so far this year, with net inflows down $25 million.
Butterfill attributed the outflows to investor sentiment surrounding the current uncertainty over when Ethereum ETF products will begin trading. On June 28, Bloomberg ETF analyst Eric Balchunas noted that financial product approvals could be delayed until the week of July 8 as the SEC and some applicants are still filing their paperwork.
Bitcoin has benefited from this sentiment shift, with inflows totaling $10 million last week. The CoinShares report noted that most Bitcoin ETF providers, including BlackRock’s IBIT and Fidelity’s FBTC, have seen modest inflows, partially offsetting the $153 million outflow from Grayscale’s GBTC fund.
The positive sentiment also led to a $4.2 million outflow from Short-Bitcoin positions. In addition, market observers noted that the price difficulties of BTC may have attracted significant attention from these bearish traders.
Large-cap alternative digital assets like Solana and Litecoin also saw smaller inflows of $1.6 million and $1.4 million respectively. Meanwhile, Butterfill added:
“Despite the positive sentiment towards cryptocurrencies this year, blockchain stocks have suffered $545 million in outflows this year, representing 19% of total AUM.”