On February 27, Eastern Standard Time, after the US stock market closed, the latest data showed that the US Ethereum Spot ETF recorded a net outflow of funds again, continuing the weak trend since mid-February. The marginal weakening of funds has sparked a new round of discussions in the market regarding ETH's mid-term performance, and this change is also seen as another signal of cooling institutional interest in secondary mainstream assets following the Bitcoin Spot ETF.
Ethereum Spot ETF Records Net Outflow Again
● Overall Fund Situation: According to statistics from Farside Investors and SoSoValue, in late February, the US 9 Ethereum Spot ETFs recorded a net outflow of funds on a single day, continuing the pattern of "slowing net subscriptions and occasional net redemptions" since mid-February.
● Representative Product Flow: Currently disclosed data shows that Ethereum Spot ETFs managed by leading managers have experienced multiple instances of net outflow this week, with redemption volumes on certain trading days significantly exceeding subscription volumes, reflecting characteristics of fund exit in a weak fluctuation.
● Rhythm Change: Compared to the continuous net inflow during the initial listing of ETFs in mid-January, the fund curve in February has clearly slowed down, with the peak of net inflows having passed, and recently there have been multiple days of "overall net outflow + individual small net inflows" showing structural differentiation.
● Price Linkage: As funds weaken, the price of ETH has corrected from its high in early to mid-February, with increased daily volatility and a decline in ETF trading volume, indicating signs of concurrent cooling of institutional and retail sentiment.
Comparison of Fund Trends with Bitcoin Spot ETF
● Launch Rhythm Differences: Since the Bitcoin Spot ETF was launched in mid-January, it recorded net inflows in the tens of billions of dollars in its first week and maintained strong subscriptions in subsequent trading weeks; the launch strength of the Ethereum Spot ETF is significantly weaker, with early net inflow scales and growth rates unable to compare with Bitcoin's initial effects.
● Structural Differentiation: During the recent round of corrections, the overall funds in the Bitcoin Spot ETF have remained primarily slightly net inflow or close to balance, with leading products maintaining their ability to attract capital; whereas the Ethereum Spot ETF has seen more overall net outflows, indicating a level-based differentiation in fund preferences between the two major assets.
● Risk Preference Signals: Fund comparisons show that institutions currently prefer to continue allocating to BTC as a "quasi-fixed income/digital gold" narrative asset, while holding a more cautious stance towards ETH, which has attributes of both public chains and tech stocks, as reflected in the smoothness and volatility of the fund curve.
● Linkage Characteristics: When inflows into the Bitcoin Spot ETF slow but do not turn negative, the Ethereum Spot ETF has already recorded multiple net outflows, reflecting that under the premise of limited overall risk budget, institutions are more inclined to prioritize reducing exposure to the more volatile and complex logic of Ethereum.
Institutional Participation and Product Landscape
● Product Quantity and Concentration: The US market currently has 9 Ethereum Spot ETFs competing, but asset scale and fund flows are highly concentrated in products under a few leading managers, with the daily trading and subscription scale of small and medium-sized products being relatively limited.
● Leading Manager Trends: From publicly available data, the top two ranked Ethereum Spot ETFs have recorded net outflows multiple times since mid-February, with redemption volumes on certain trading days accounting for the majority of the market's net outflows, indicating that institutional reallocation mainly occurs in large-scale products.
● Trading Activity: Compared to the high turnover period at the beginning of January's launch, the overall trading volume of Ethereum Spot ETFs has declined since February, with trading dynamics transitioning from "emotion-driven short-term speculation" to "structural adjustments by a small number of institutions and high-net-worth accounts."
● Changing Participation Profile: The rhythm of fund inflows and outflows shows that the early enthusiasm characterized by "trying out" and "positioning" has significantly cooled, with the marginal changes now dominated by professional funds more sensitive to risk-return trade-offs, which are more responsive to price and policy signals and are more likely to reduce positions during short-term negative or uncertain amplifications.
Potential Impact on ETH's Mid-Term Trend
The net outflow of funds from the Ethereum Spot ETF is not an isolated event but a result of the resonance created by marginal tightening of macro liquidity, internal rotation of crypto assets, and regulatory expectation games. As Bitcoin further strengthens its "main asset" status through the Spot ETF, ETH, representing technology growth assets, faces higher discount rates and valuation pressures from a traditional fund perspective. In the mid-term, if the Ethereum Spot ETF struggles to return to a stable net inflow state, the pace of institutional holding ratio increase for ETH may slow down, and its valuation pricing will increasingly rely on on-chain fundamentals, technological upgrade progress, and the realization of new narratives within the Ethereum ecosystem such as L2 and Restaking. The weakness at the fund level does not necessarily mean that long-term logic is denied, but it will amplify price elasticity in macro fluctuations, making ETH more susceptible to amplified volatility during risk preference switches, thereby extending the upward cycle and compressing short-term elasticity.
Bull-Bear Divergence and Market Sentiment
● Optimistic/Supportive Side:
● They believe that the current net outflow scale of the Ethereum Spot ETF is still within a controllable range, reflecting more of a structural exit of early profit-taking and short-term allocation funds rather than a systemic withdrawal of long-term funds.
● They point out that the price correction of ETH since February, combined with the net outflow of the ETF, helps to clear short-term sentiment and leverage, laying the groundwork for attracting incremental funds under subsequent catalysts such as the Shanghai upgrade and L2 expansion plans.
● They emphasize that similar to Bitcoin, the true pricing effect of the Ethereum Spot ETF lies in medium to long-term "slow variable allocation", and short-term net outflows are not sufficient to negate the broader trend of "ETH being included in traditional asset portfolios."
● Pessimistic/Cautious Side:
● They are concerned that the Ethereum Spot ETF has failed to replicate Bitcoin's initial strong capital-absorbing curve, indicating that institutional confidence and understanding of ETH are not as strong as BTC, which may further weaken Ethereum's voice in the "institutional era."
● They believe that in the current macro environment, funds are more inclined to concentrate their risk budgets on a single main asset, with Bitcoin enjoying a premium for being "too big to fail + clearer regulatory paths," while ETH faces dual uncertainties of regulation and technology discount.
● They point out that in the absence of clear incremental fund catalysts, the continuous net outflow of the ETF is likely to resonate with technical pressure levels, making ETH's mid-term trend weaker and more volatile, and potentially dragging down the valuation recovery pace of other tokens within the Ethereum ecosystem.
Subsequent Observations and Trend Outlook
In the short term, the market will focus on whether the Ethereum Spot ETF can stop the net outflow and return to a balanced or even mildly net inflow state, as well as the marginal changes in macro interest rate expectations and regulatory progress. If the leading ETFs significantly narrow their net outflow scale in the coming trading weeks, combined with upgrades in the Ethereum ecosystem and a rebound in on-chain activity, ETH may have the opportunity to rebuild the logic loop for institutional accumulation in the mid-term. Conversely, if funds continue to withdraw from the Ethereum Spot ETF while the Bitcoin Spot ETF maintains a relatively robust capital-absorbing curve, ETH's performance may continue to lag behind BTC, and the market narrative will shift from "institutional assets parallel to Bitcoin" to "high-volatility growth-type allocation targets." In this scenario, investors need to pay more attention to the technological and application-level progress of Ethereum itself, rather than simply betting on the passive uplift effect brought by ETF fund inflows.
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