ETF Outflows Signal Institutional Retreat in Bitcoin and Ethereum, Says Glassnode

Bitcoin and Ethereum, the two largest cryptocurrencies by market value, are recording sustained net capital outflows from their associated exchange-traded funds (ETFs). According to analytics firm Glassnode, this trend reflects a partial pullback by institutional investors, who are reducing exposure instead of adding new funds. While this does not indicate a full withdrawal from the crypto market, the ongoing outflows suggest a decline in institutional participation, which could restrict liquidity and dampen near-term price momentum.

Institutional Outflows Persist

Glassnode highlighted that the 30-day moving average of net flows into U.S. spot Bitcoin and Ethereum ETFs has turned negative and remained at that level. The sustained trend points to a phase of limited participation and partial disengagement by institutional investors, reinforcing an overall contraction of liquidity in the crypto sector.

ETF flows have declined since mid-October, a movement that tends to follow spot market trends. These funds often indicate institutional investor sentiment, which has played a significant role in shaping the crypto market this year. At present, sentiment appears more cautious, reflecting the broader slowdown across markets.

The Kobeissi Letter reported on Tuesday that selling pressure in crypto ETFs has returned. Last week, these funds recorded $952 million in withdrawals, marking six weeks of outflows over the past ten. Ethereum ETFs led with $555 million, followed by Bitcoin funds at $460 million, indicating ongoing capital movement from these funds.

The trend has continued into this week. Data from SoSoValue shows that institutional activity remained uneven:

• Bitcoin experienced outflows of $142.19 million on Monday and $188.64 million on Tuesday.
• Ethereum posted a modest inflow of $84.59 million on Monday that quickly turned into an outflow of $95.5 million on Tuesday, reflecting unstable institutional support.

Whale Activity and ETF Drawdowns Limit Bitcoin Recovery

This persistent withdrawal reflects broader selling pressure identified by CryptoQuant, which linked Bitcoin’s slow recovery to activity from large investors. ETF drawdowns from their all-time highs, along with ongoing whale selling since October, have weighed on Bitcoin’s price momentum and limited its near-term upside.

Despite overall outflows, BlackRock’s iShares Bitcoin Trust (IBIT) recorded modest inflows on certain days. Farside Investors reported $111.2 million on 17th December and $32.8 million on 18th December. Since its launch, the fund has amassed $62.34 billion, maintaining its status as the largest spot Bitcoin ETF and outperforming competitors in total holdings.

Eric Balchunas, Bloomberg’s senior ETF analyst, noted that IBIT is the only ETF on Bloomberg’s “2025 Flow Leaderboard” showing a negative return this year. Yet, the fund ranked sixth in inflows and attracted more investment than SPDR Gold Shares (GLD), which increased by 64% over the same period, highlighting its continued appeal despite the overall market weakness.