Ethereum Slides 35% in a Month as ETF Flows Turn Negative – A Deep‑Dive into the Data
By [Your Name] – February 25, 2026
A new study from research firm BestBrokers reveals that the recent slump in Ether (ETH) has spilled over into the market for U.S. spot Ethereum exchange‑traded funds (ETFs). The report, which tracks ETF holdings and cash flows in real time, shows a sharp contraction in both the number of tokens held in these funds and the dollar value of their assets under management (AUM).
What the Numbers Show
| Metric | Late January 2026 | February 23 2026 | % Change |
|---|---|---|---|
| ETH held in U.S. spot ETFs | > 6.1 million ETH | ≈ 5.8 million ETH | – 4.9 % |
| ETF‑related AUM | ≈ $18.6 bn | ≈ $11.9 bn | – 36 % |
| ETH price (CoinGecko) | – | ≈ $1,850 | – 35 % (30‑day) |
| BTC held in U.S. spot ETFs | 1.30 million BTC (peak) | 1.26 million BTC | – 3 % |
| Net BTC ETF outflows YTD | – | $4 bn (cumulative) | – |
Source: BestBrokers “Spot Crypto ETF Flow Report” (Oct 23 2025).
Concentration in the Ethereum ETF Space
BlackRock’s iShares Ethereum Trust dominates the landscape, controlling roughly 57 % of all ETH held across U.S. spot ETFs. Grayscale and Fidelity together hold the remaining tokens, underscoring a high degree of issuer concentration.
Market Context
Ether’s price has tumbled roughly 35 % over the past 30 days and is down about 40 % from three months ago. The price decline coincides with an evaporating appetite for riskier crypto assets amid heightened market volatility and macro‑economic uncertainty.
The ETF outflows are not isolated to Ethereum. Spot Bitcoin ETFs have also begun to feel the pressure, experiencing cumulative net outflows of more than $4 bn since the start of the year. BlackRock’s iShares Bitcoin Trust (IBIT) alone recorded 19,300 BTC of redemptions in February, marking the first mid‑quarter dip in Bitcoin ETF holdings since the products launched.
Analysis
-
Sentiment‑Driven Liquidity Drain
The shrinkage in ETH ETF holdings mirrors the broader pull‑back from crypto exposure. Investors appear to be reallocating capital away from assets perceived as “high‑beta,” a trend that is amplified in Ethereum‑focused funds which historically have been more volatile than their Bitcoin counterparts. -
Issuer Concentration Risks
With BlackRock accounting for more than half of all ETH in U.S. ETFs, any strategic shift by the firm—whether a change in product fees, marketing, or rebalancing policy—could disproportionately affect the market. Smaller providers such as Grayscale and Fidelity lack the scale to offset such moves. -
Implications for DeFi and Institutional Participation
Ethereum remains the backbone of the decentralized finance (DeFi) ecosystem. A sustained decline in institutional exposure, signaled by ETF outflows, could translate into lower liquidity for DeFi protocols that rely on large token inflows for staking, lending, or liquidity provision. Conversely, the price dip may present opportunistic entry points for risk‑tolerant participants. - Bitcoin vs. Ethereum ETF Dynamics
The report suggests a divergence in how institutions view the two leading cryptocurrencies. Bitcoin ETFs are showing a modest net outflow but still retain a substantial capital base, hinting that investors treat BTC as a “digital store of value.” Ethereum, on the other hand, is more closely tied to application‑layer sentiment, making its ETFs more vulnerable to short‑term market swings.
Key Takeaways
- ETF Outflows Signal Weakening Demand: U.S. spot Ethereum ETFs have shed roughly 5 % of their token holdings and over a third of their dollar AUM in just six weeks.
- BlackRock’s Dominance Raises Concentration Concerns: Over half of all ETH in U.S. ETFs is held by a single issuer, magnifying the impact of any policy or strategic changes.
- Price Decline and ETF Redemptions Reinforce Each Other: The 35 % drop in Ether’s price over the month aligns with the surge in redemptions, indicating a feedback loop between market sentiment and institutional exposure.
- Bitcoin ETFs Remain More Resilient: Despite $4 bn of net outflows YTD, Bitcoin ETFs have not yet experienced a mid‑quarter decline, suggesting a more patient, long‑term view from institutional investors.
- DeFi Ecosystem May Feel the Ripples: Reduced institutional capital could strain liquidity in Ethereum‑centric DeFi projects, though price dislocations may also create entry points for seasoned traders.
Outlook
If the current trend persists, Ethereum‑focused ETFs could continue to see outflows, especially if broader risk appetite remains subdued. However, the crypto market’s historically cyclical nature means that a rebound is plausible should macro‑economic conditions improve or if compelling developments emerge on the Ethereum roadmap (e.g., upgrades enhancing scalability or new DeFi use cases).
Stakeholders—ranging from retail investors to institutional asset managers—should monitor ETF flow data alongside on‑chain metrics to gauge the health of Ethereum’s broader ecosystem.
For a complete view of the data and methodology, see BestBrokers’ full report: Spot Crypto ETF Flow Report, Oct 23 2025.
Source: https://thedefiant.io/news/tradfi-and-fintech/eth-slides-35-in-a-month-as-etf-flows-turn-negative
