Spot Ether (ETH) exchange-traded funds (ETFs) started the week with heavy withdrawals. On Aug.18, investors pulled $196.7 million from these funds, the second-largest daily outflow since their launch. The biggest single-day withdrawal remains $465 million on Aug. 4.
An ETF is a fund that holds assets like cryptocurrencies and allows investors to trade shares on traditional stock exchanges. Spot Ether ETFs hold ETH directly, meaning that when investors put money into these products, the fund must buy ETH in the open market. This creates extra demand and often supports the token’s price.
The reverse is also true. When investors redeem or sell their ETF shares, the fund must release or sell ETH. Large outflows therefore reduce demand and can add selling pressure to the market.
Outflows Extend Last Week’s Sell-Off
The redemptions followed a smaller $59 million exit on Friday, pushing the two-day total to $256 million. The trend shows that some investors who poured money into Ether ETFs earlier this month are now locking in profits or reducing exposure.
Still, the withdrawals look small compared to the record $3.7 billion inflows that Ether ETFs attracted over the previous eight trading days. During that streak, some single-day inflows topped $1 billion, underlining the strong appetite for ETH exposure before the recent reversal.
Farside data showed BlackRock’s iShares Ethereum Trust (ETHA) and Fidelity’s Ethereum Fund (FETH) accounted for most of Monday’s exits, with $87 million and $79 million leaving their products.
On Friday, Fidelity’s fund alone posted $272 million in outflows, driving the bulk of that day’s losses.
Despite the outflows, BlackRock remains one of the largest institutional holders of Ether. As of Friday, ETHA held around 3.6 million ETH worth $15.8 billion. By Aug.18, the value of those holdings slipped to $15.6 billion as ETH’s price dropped about 6.5%.
Ether Unstaking Queue Hits Record Levels
The outflows also come at a time when more validators are leaving Ethereum’s staking system. Data from ValidatorQueue showed the unstaking queue reached an all-time high of 910,000 ETH, worth nearly $3.9 billion, on Aug.19.
Validators who want to withdraw their ETH now face a waiting period of more than 15 days. Analysts warn that this growing “exit line” could add more selling pressure if large amounts of ETH are eventually cashed out.
The heavy $197 million withdrawal from Ether ETFs on Monday added to selling pressure in the market. ETH’s price slipped about 6.5% over the past week, falling from recent highs as redemptions reduced demand.
Large redemptions from major issuers like BlackRock and Fidelity forced ETF funds to release ETH back into circulation. This direct supply effect contributed to the price drop, leaving ETH unable to break above immediate resistance at $4,400.
If withdrawals continue, analysts warn ETH could fall back toward its support near $4,150.
