A substantial sell-off impacted spot Ether funds as the week began, with outflows nearing $200 million on Monday, continuing a trend observed since the previous week.
Exchange-traded funds (ETFs) holding spot Ether (ETH) experienced $196.7 million in outflows on Monday. This represents the second-largest daily outflow amount since these funds were first introduced. Data from SoSoValue indicates that only August 4 saw higher outflows, reaching $465 million.
These recent withdrawals followed Friday’s losses of $59 million, bringing the total outflows for the two-day period to $256 million.
It’s worth noting that these outflows are still relatively small when compared to the previous eight trading days, which saw a record inflow of $3.7 billion. On some of those days, inflows exceeded $1 billion.
Significant Outflows from BlackRock’s ETHA
Farside data shows that BlackRock and Fidelity experienced the largest ETH ETF outflows among all issuers on Monday, with $87 million and $79 million respectively leaving their funds.
Notably, Fidelity’s Ethereum Fund (FETH) alone recorded outflows of $272 million last Friday. This amount significantly contributed to the overall daily outflow of $59 million.
BlackRock has emerged as a major institutional holder of Ether. Official data for the iShares Ethereum Trust ETF (ETHA) reveals that the fund held approximately 3.6 million ETH as of last Friday, with a value of $15.8 billion.
Since then, the dollar value of ETHA’s holdings has decreased by 1.5%, reaching a reported $15.6 billion on Monday.
CoinGecko reports that during this same period, the price of ETH has fallen by approximately 6.5%.
Increasing Ether Unstaking Queue
These record Ether ETF outflows and the volatility in ETH prices are occurring alongside a growing queue for Ether unstaking. This refers to the volume of Ether awaiting withdrawal from staking pools by Ethereum validators.
According to ValidatorQueue , a website that monitors validator queues on the Ethereum proof-of-stake (PoS) network, the validator exit line reached an all-time high of 910,000 ETH on Tuesday. This amount is valued at approximately $3.9 billion.
The data further indicates that validators are now experiencing a waiting period of at least 15 days and 14 hours to unstake their ETH.
Some analysts observing the cryptocurrency market have expressed concerns about the potential negative consequences of the expanding ETH unstaking queue, cautioning about a possible “unstakening” event.
Bitcoin (BTC) advocate Samson Mow posted on X last Thursday, stating “The flippening will never happen but the unstakening is coming,”
He also suggested that the ETH/BTC price ratio could potentially fall to “0.03 or lower.” TradingView indicated that at the time of writing, Ether was trading at 0.036 BTC.
Ether ETFs Growing Relative to Bitcoin ETFs
In recent weeks, spot Ether ETFs have been outpacing Bitcoin ETFs in terms of inflows, reflecting a growing preference among investors for ETH over BTC.
Hildobby, a data analyst at Dragonfly, reported that as of Monday, the ratio of BTC supply versus BTC held in ETFs was 6.4%. In comparison, the ratio for ETH and Ether ETFs was 5%.
The analyst forecasted on Monday, “If the current growth rate continues, the ETH-ETF will surpass the BTC-ETF in terms of the percentage of total supply contained by September.”
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