Ethereum ETFs Record $75M in Daily Outflows, Price Stalls

BlackRock’s ETF sees major withdrawals as market sentiment weakens

On December 5, Ethereum spot ETFs recorded a significant outflow of $75.21 million, marking a troubling trend as all nine funds failed to attract any new investments. BlackRock’s ETHA fund was solely responsible for this withdrawal, which represents the fourth consecutive day of net redemptions for Ethereum (ETH) ETFs. Over the past month, ETH has seen a decline of 10.3%, with a 24-hour trading price around $3,030, fluctuating between $2,995.50 and $3,146.10. This downturn of 2.7% in just one day is a clear indication of the challenges facing Ethereum in the current market.

Ethereum exchange balances drop to a record low, tightening supply conditions

Interestingly, despite the ongoing outflows from ETFs, Ethereum’s exchange balances have plummeted to just 8.84% of the total supply, the lowest level ever recorded. This situation contrasts sharply with Bitcoin, which maintains an exchange balance of 14.8%. The tightening supply of ETH is attributed to a growing trend where more tokens are being locked away in staking, restaking, and other forms of long-term custody, reducing the available supply in the market.

Bitcoin ETFs show contrasting inflows amidst Ethereum's outflows

While Ethereum ETFs have been facing significant outflows, Bitcoin ETFs are experiencing a different scenario. On the same day, Bitcoin funds recorded inflows totaling $54.79 million, pushing their total net assets to $117.11 billion. This stark contrast highlights the different market sentiments surrounding Ethereum and Bitcoin, with Bitcoin attracting new investments while Ethereum struggles to maintain investor interest.

Market sentiment weighs on Ethereum, but supply dynamics suggest price potential

The current market sentiment appears heavy for Ethereum, yet the underlying supply dynamics may lead to a future price surge. Observers note that as ETH continues to be withdrawn from exchanges and locked into various uses such as staking and collateral, the potential for price appreciation increases when demand eventually rises. As the market awaits a clear direction, the tightening supply of ETH may play a crucial role in shaping future price movements.