Ethereum ETFS recorded a dramatic slowdown in September, with monthly inflows collapsed to just $285 million from $3.9 billion in August, according to BlockWorks research data.
The sharp drawdown is one of the sharpest reversals since ETH ETF began earlier this year.
The one-month change reflects Blockworks’ research Analyst calls “Flow-driven market.” Last week was the most negative week in total since the sale in March. The Bitcoin ETF recorded a $900 million outflow, while the Ethereum ETF lost $800 million. Both asset classes reinforce the paper that shows ETF flows look at mirroring underlying spot prices, and secondary market activities of funds determine short-term price actions.
sauce: Research on Blockworks
Some of the latest spills could be the result of monthly trends, according to James Butterfil, Coinshares’ head of research.
“The evolving ETF landscape supports the growth of a much more active options market,” Butterfill told BlockWorks.
In the case of ether, the reversal was particularly serious. ETH reached a peak of nearly -20% price in September after gathering at the end of the month on September 30th and at the end of the month on September 30th, stoking away -3.5% overall. The ETF is expected to weaken volatility by fixing institutional demand, despite the trend in September.
“When (ETF) was launched in early 2024, Bitcoin’s 30-day average volatility was around 40%. Today it’s down to just 25%,” Batafil said.
A closer look at issuer-level flows shows divergence within the ETH fund. Etha recorded a net inflow of $315 million, but smaller products like Feth (-51.6M), Ethw (-38.8m) and Ethe (-28.7m) fell below the category.
sauce: Research on Blockworks
Meanwhile, Bitcoin ETFs continued to attract heavier absolute flows and had more resilience than ether. The BTC ETF rebounded against a net inflow of $3.5 billion in September. Despite the weakness of the final week, the work at the beginning of the month does not only offset the redemption.
sauce: Research on Blockworks
Batafil cites fiscal uncertainty as a tailwind. “The US$1.1 billion inflow into Bitcoin appears to be closely tied to this shift as recent macro data has been weaker than expected and we are raising hopes for not one but two interest rate cuts this year,” he said.
The split widened the performance gap between majors. The Bitcoin ETF remains a favourable facility vehicle, and the Ethereum ETF has proven to be more vulnerable to emotional turmoil. Some investors have opted for alternative proxy plays, like the Treasury of companies that hold ETH directly, but for now, the ETF lens remains the cleanest gauge where the large pool of capital is spinning.
