U.S. ether ETFs lost $201.9 million on Tuesday, all from BlackRock's ETHA, while bitcoin ETFs added $118.8 million led by BlackRock's IBIT. One issuer sits on both sides of the split.
Institutional money is treating bitcoin and ether very differently, and the divergence widened sharply on Tuesday.
U.S. spot ether exchange-traded funds recorded net outflows of $201.9 million, every dollar of it from the iShares Ethereum Trust, known as ETHA. No other ether fund saw any flow. It was the sixth consecutive day of outflows and the largest single-day withdrawal since at least mid-September.
Over those six sessions, ether ETFs have lost $407.9 million. Tuesday alone accounted for about half of that.
Bitcoin funds moved the other way. Spot bitcoin ETFs took in $118.8 million, led by $122.0 million into the iShares Bitcoin Trust, or IBIT. A smaller fund added $7.8 million, and Grayscale's bitcoin mini trust saw $11.0 million of outflows. Over the five sessions from to , bitcoin ETFs gathered a net $321.6 million.
The concentration stands out. BlackRock's two products were effectively the whole story on Tuesday: buying in its bitcoin fund, selling in its ether fund. Tuesday was also ETHA's first trading session after a 1-for-3 reverse share split, though the split changes the share count, not the value of holdings.
Three explanations
There are three ways to read the flows. The first is rotation, with investors selling ether exposure to buy bitcoin. The second is a single large holder redeeming from ETHA, which would explain why no other ether fund moved. The third is profit-taking: ether rallied about 50% over three months during the summer, largely on ETF and corporate treasury demand.
That last point is the risk for ether bulls. The asset's third-quarter outperformance was driven by two kinds of institutional buyers: funds and corporate treasuries. The fund leg has now reversed for six sessions. The largest corporate holder, BitMine Immersion Technologies, held 6,016,414 ether as of , about 4.9% of supply and roughly 89,000 tokens short of the 5% level it has set as its target.
Ether traded near $2,610 early Wednesday, down 3.25% on the day.
What to watch
BitMine Chairman Tom Lee is scheduled to speak at the Token2049 conference in Singapore on Wednesday. Any signal that the company is slowing purchases as it nears 5% would remove the second pillar of ether demand just as the first is weakening. A return to inflows at ETHA would ease that concern.