Record ETP Outflows Shake Bitcoin And Ethereum

In one week, crypto exchange-traded products (ETPs) recorded $1.43 billion in net outflows, their largest drop since March. This sudden disengagement reflects rising tensions around US monetary policy and directly affects the market’s two pillars, bitcoin and Ethereum. In an environment of increased volatility, this massive pullback raises questions about institutional investors’ strategies and the evolving power dynamics among different assets.

A sudden pullback on ETPs

According to CoinShares, crypto exchange-traded products (ETPs) posted a net outflow of $1.43 billion last week, abruptly ending the positive momentum observed in previous weeks.

“These are the biggest outflows since March”, said James Butterfill, head of research.

This trend reversal follows two consecutive weeks of inflows totaling $4.3 billion. The movement concentrated on the two dominant market assets, bitcoin and Ether, but also affected some altcoins.

Here are the key figures to remember :

• Bitcoin (BTC) : more than one billion dollars in outflows, representing the majority of the week’s negative flows ;

• Ethereum (ETH) : about $430 million in withdrawals, most concentrated on Tuesday ;

• XRP : over $25 million in net inflows, indicating a certain renewed institutional interest;

• Solana (SOL) : $12 million in inflows ;

• Sui (SUI) : $13 million in outflows ;

• Toncoin (TON) : $1.5 million in withdrawals.

These movements occur in a context of broad price declines. Bitcoin fell from $116,000 to $112,000 between August 18 and the end of the week, while Ethereum dropped from $4,250 to under $4,100.

This massive pullback is largely explained by a deterioration in market sentiment related to uncertainties about the US monetary policy trajectory. The figures released this week show clear distrust toward crypto assets in the short term.

A trend reversal influenced by Jackson Hole

While the start of the week was marked by clear risk aversion, a shift in market sentiment appeared as early as Thursday, following Jerome Powell’s speech at the Jackson Hole symposium.

The Fed chairman made remarks considered more moderate than expected, enough to trigger a contrary movement. Thus, $594 million in inflows were recorded at the end of the week, according to CoinShares.

“The tone perceived as flexible clearly changed the game, especially for Ethereum,” said James Butterfill. This reversal translated into a form of market stabilization, although partial and late.

This renewed interest was more felt on Ether than on bitcoin. The market’s second largest asset recorded a rebound midweek, bringing weekly net outflows to $440 million, despite Tuesday’s sharp drop.

Conversely, bitcoin recorded $1 billion in outflows despite the improved climate. This divergence is also noticeable on monthly flows. Since the beginning of August, bitcoin shows $1 billion in withdrawals, compared to $2.5 billion inflows for Ethereum. “Net inflows on Ethereum now represent 26 % of assets under management, compared to 11 % for bitcoin,” Butterfill notes, confirming a structural appetite change.

These data reflect a shift in institutional preferences, perhaps temporarily, toward assets seen as having more resilient potential in the current context. However, the end-of-week rebound could only be a temporary respite. If the easing observed at Jackson Hole is confirmed in the coming weeks, it could lead to inflows.