Bitcoin ETF Flows Turn Red as Ethereum ETFs Absorb Institutional Momentum

Bitcoin ETF Flows Turn Red as Ethereum ETFs Absorb Institutional Momentum

Ethereum ETF Inflows Surge to $332M as Bitcoin Sees $285M in Redemptions

Spot Bitcoin ETFs have entered a cooling phase after months of aggressive inflows. Over the past three consecutive sessions, Bitcoin ETFs registered $285 million in net outflows, led by Fidelity’s FBTC, which saw $227 million withdrawn in a single day. This comes amid Bitcoin's struggle to hold above the $120,000 level, with support sliding precariously toward $110,000.

In stark contrast, Ethereum ETFs are experiencing an institutional renaissance. On July 23, Ethereum spot ETFs posted $332.2 million in net inflows, marking their fourteenth straight day of positive flows. Notably, BlackRock’s ETHA ETF accounted for $324.6 million of that day’s total—reflecting a surge of confidence in Ethereum as a programmable, yield-bearing alternative.

Since launching in July 2024, ETH ETFs have now amassed over $19.6 billion in AUM, up sharply from the $8.3 billion recorded just a month ago. Ethereum’s inflows now represent 4.6% of its market cap, a ratio not seen since early DeFi cycles.

ETH/BTC ETF Flow Ratio Hits Record High

Institutional portfolios are not merely rotating—they’re repositioning for structural divergence. The ETH/BTC spot ETF flow ratio surged from 0.02 in May to 0.12 by July, indicating an aggressive overweight shift toward Ethereum exposure. This also aligns with trading volume data: Ethereum ETFs flipped Bitcoin in weekly volume, registering $25.7 billion versus Bitcoin’s $24.4 billion, according to CryptoQuant.

Swissblock’s commentary reinforces this pivot: “ETH flows are accelerating. BTC flows are stabilizing.” The firm characterizes the trend as moving from “disbelief” to “conviction,” underscoring that this is not a speculative bounce, but a structural shift in capital behavior.

Why Institutions Are Choosing ETH Over BTC Now

Multiple triggers are driving this ETH inflow boom:

• Ethereum’s staking economy, supercharged by the Pectra upgrade, is attracting yield-seeking treasuries.

• Reduced selling pressure is evident as ETH/BTC inflow ratios hit five-year lows, per CryptoQuant.

• Whale activity is ramping—seven new wallets absorbed 466,253 ETH (~$1.7 billion) last week, with one wallet alone buying $148 million worth.

Meanwhile, Bitcoin appears to be a victim of its own prior success. With YTD returns of 74%, large holders are taking profits and rotating into higher-beta plays. Bitcoin spot ETF cumulative inflows still lead at $54.4 billion, but the short-term flow narrative has flipped entirely.

ETH ETF Momentum Outpaces Legacy Benchmarks

Ethereum ETFs aren’t just catching up—they’re outperforming historical ETF benchmarks. BlackRock’s ETHA ETF hit $10B in AUM in just 251 days, making it the third-fastest ETF in history to hit that milestone, behind only IBIT and FBTC. The inflows between July 16–23 include:

• $726.7 million (July 16)

• $602 million (July 17)

• $533.8 million (July 23)

These inflows place Ethereum ETFs among the Top 5 in 1-week and 1-month global ETF flows, rivaling major equity and bond funds.

Macro & Regulatory Tailwinds Accelerate ETH Rotation

The backdrop isn’t just technical. The recent passing of three key legislative bills—the GENIUS Act, the Anti-CBDC Act, and the CLARITY Act—has added a critical dose of regulatory certainty. Ethereum’s involvement in stablecoins, tokenization, and programmable assets has made it a natural beneficiary of this shift.

Moreover, Ethereum’s architecture positions it as the foundation for future tokenization plays, especially as real-world assets (RWAs) become investible via blockchain rails.

Verdict: Institutional Capital Has Rotated. ETH Leads. BTC Consolidates.

While Bitcoin’s long-term structural narrative—halving, store of value, and scarcity—remains intact, the short-term flow regime favors Ethereum. ETH’s 14-day inflow streak, record whale accumulation, and trading volume dominance point to an ongoing market cycle transition. The ETH/BTC flow divergence may extend further if Ethereum breaks past its $3,860 resistance with conviction.

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