ETF Market Faces September Slowdown

Publicly traded crypto ETFs faced a downturn in early September, as investment flows ebbed and trading activity softened. According to CoinShares data, weekly trading volume fell 27%, driving net outflows of about $352 million despite a supportive macro backdrop that included a weak U.S. jobs report and expectations of Federal Reserve rate cuts.

The divergence between Ether and Bitcoin funds defined the week. Ether-focused ETFs shed $912 million, while Bitcoin products absorbed $524 million in inflows—highlighting a rotation of capital rather than a collapse in demand.

U.S. Outflows vs. German Inflows

Geographic differences sharpened the picture.

• United States: Roughly $440 million in outflows, signaling risk-off sentiment among U.S. investors.
• Germany: About $85 million in inflows, showing European investors took a more constructive stance.

This regional split underscores how global markets interpret macro signals differently.

Why Ether Funds Led the Retreat

ETH-focused products bore the brunt of outflows. Analysts say the sharp withdrawals likely stemmed from profit-taking near all-time highs and broader macro uncertainty.

• Jillian Friedman (Symbiotic COO): ETH ETFs are “risk-asset plays,” and current withdrawals look like capital rotation, not loss of faith. She noted that U.S. ETH ETFs still hold ~$26 billion AUM, led by BlackRock’s ETHA at $16 billion.
• Vincent Liu (Kronos Research CIO): ETH selling coincides with BTC inflows, suggesting investors are shifting into more “tangible” assets like gold and Bitcoin as defensive positioning.

Despite outflows, Ether’s spot price held steady, ranging between $4,450 and $4,273 over the week.

Bitcoin Funds Attract Capital

Bitcoin ETFs proved more resilient, drawing $524 million in inflows. Analysts view this as evidence of BTC’s growing role as a “macro hedge” amid uncertainty. Inflows helped cushion broader crypto ETF weakness and reinforced the narrative that Bitcoin, like gold, functions as a defensive allocation in institutional portfolios.

Long-Term Outlook Still Positive

While the week was marked by turbulence, overall flows in 2025 remain ahead of 2024’s pace. Year-to-date ETF inflows reflect robust structural demand, suggesting institutions still view regulated ETFs as the preferred vehicle for digital-asset exposure.

The takeaway: short-term outflows are normal in volatile markets. Capital rotation between BTC and ETH funds highlights evolving institutional strategies rather than waning interest in crypto overall.