Spot Ethereum exchange-traded funds (ETFs) have witnessed sustained outflows in recent weeks amid rising concerns over a potential U.S. recession, coupled with a pronounced decline in Ethereum’s market performance.
Recent data indicates that Ethereum ETFs experienced net asset outflows totaling $82.4 million last week alone, marking the seventh consecutive weekly loss and bringing their cumulative inflow since inception down to roughly $2.2 billion. Currently, total assets managed by Ethereum-backed ETFs stand at about $5.25 billion, with BlackRock’s ETHA fund and Grayscale’s ETHE each managing roughly $1.85 billion. Grayscale’s smaller ETH fund follows with about $711 million in assets, while Fidelity’s FETH holds approximately $580 million.
In sharp contrast, spot Bitcoin ETFs have fared significantly better, demonstrating stronger investor appetite. Although cumulative outflows from Bitcoin funds have exceeded $35 billion, their total net assets remain robust, currently around $93 billion.
Ethereum’s underperformance appears to be a key driver behind investor withdrawals. Since reaching its peak in November of the previous year, Ethereum’s price has plummeted by roughly 62%, hitting around $1,655 at present. Unlike Bitcoin, which surged to new all-time highs earlier this year, Ethereum’s valuation remains well below its historical maximum of $4,872. To illustrate investor losses over time: a hypothetical $1,000 investment in Ethereum at this point in 2022 would now be reduced to around $745. By contrast, the same amount invested in Bitcoin would have appreciated to approximately $1,400.
The substantial decline in Ethereum’s relative attractiveness has been exacerbated by increased competition from alternative blockchain platforms, including both Layer-1 and Layer-2 networks. Notable competitors such as Solana, Base, Tron, and Arbitrum have attracted substantial development activity, user engagement, and investor interest, significantly eroding Ethereum’s market dominance. This shifting landscape has led to Ethereum no longer being perceived as the most profitable chain within the crypto space. Several projects like Uniswap, Jito, and especially Solana have overtaken Ethereum in key metrics this year.
From a technical analysis viewpoint, Ethereum’s relative price performance against Bitcoin paints an even bleaker picture. The ETH/BTC pair has steadily deteriorated, plunging from a high of 0.088 in 2021 to its current level of approximately 0.0188—the pair’s lowest point in five years. Technical indicators support continued bearish sentiment: the trading pair remains beneath all significant moving averages, while the Average Directional Index (ADX)—an indicator assessing trend strength—has increased sharply, currently standing around 44. Such technical signals strongly suggest the pair could move even lower, potentially reaching the next critical support level at 0.016. This would constitute a decline of approximately 92% from current levels and mark its lowest valuation relative to Bitcoin since September 2019.
