In a recent downturn, U.S.-based Ether exchange-traded funds (ETFs) have seen significant capital outflows, reflecting investor caution. These withdrawals come as the value of Ether (ETH) has dropped sharply, marking a week of challenging market conditions. As the Securities and Exchange Commission’s (SEC) decision on staking approaches, the implications for these funds remain uncertain.
Ether ETFs Experience Consecutive Capital Outflows
Recent data from Farside indicates that Ether ETFs have faced five consecutive days of net outflows, totaling $795.8 million. On just one day, Friday, withdrawals reached $248.4 million, compounding the already grim outlook for these funds.
During the past week, the price of Ether fell by 10.8%, trading at approximately $3,995.33 at the time of reporting. This marks the first instance of five consecutive daily outflows for Ether ETFs since the week ending September 5, when the asset was trading near $4,300. The ongoing pressure suggests a declining short-term appetite among investors, though developments related to staking may reshape market sentiment in the future.
Market Dynamics May Shift with Staking Approval
Market participants are closely monitoring signals from the U.S. SEC regarding the potential approval of staking for Ether ETFs. Staking allows investors to earn returns by locking up their Ether, potentially providing additional incentives for long-term holders and enhancing the utility of these funds.
On September 19, it was reported that Grayscale is preparing to stake a portion of its substantial Ether holdings. This move is seen by some as a vote of confidence that regulators may soon allow staking in ETFs. Despite this potential catalyst, current trading data indicate ongoing selling pressure.
Cointelegraph has pointed out that net buyer volume on Binance has remained negative over the past month, indicating a slowdown in retail participation in Ether. Crypto analyst Bitbull described the recent series of ETF outflows as “a sign of capitulation,” attributing it to unusually high panic selling.
Bitcoin ETFs Also Face Withdrawals
The selling trend is not isolated to Ether. Bitcoin ETFs have also seen five consecutive days of outflows, totaling $897.6 million during the same period.
Bitcoin’s price has decreased by 5.28% over the past week, trading at approximately $109,551 at publication. While these recent capital withdrawals reflect a slowdown in momentum, analysts maintain a generally optimistic view of Bitcoin ETFs’ long-term trajectory.
ETF analyst James Seyffart commented in a recent podcast that although Bitcoin ETFs have not been “perfectly hot” over the past two months, they still represent “the largest launch of all time.” Seyffart added that the capital influx “is unlike anything we’ve ever seen,” asserting that Bitcoin ETFs are performing “as well as you can hope for.”
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