Glassnode Reveals: ETF Outflows Signal Institutional Retreat from Bitcoin and Ethereum

Institutional money is walking out the door. Fresh data from blockchain analytics firm Glassnode shows a clear pattern of capital flight from major cryptocurrency exchange-traded funds, with Bitcoin and Ethereum taking the biggest hits.

The Big Unwind

It's not a trickle—it's a trend. Net outflows from crypto ETFs have turned from a talking point into a tangible market force. The numbers don't lie, and right now they're spelling a cautious, if not outright bearish, short-term stance from the big players. The very vehicles designed to bring Wall Street to crypto are seeing Wall Street head for the exits.

Bitcoin and Ethereum in the Crosshairs

The flagship assets aren't immune. Analysis points to sustained selling pressure in products tied to Bitcoin and Ethereum, suggesting a recalibration of institutional portfolios. This isn't panic selling; it's a strategic retreat. The smart money is taking chips off the table, waiting for clearer signals or simply locking in gains—or limiting losses—from earlier positions.

A Reality Check for the Narrative

For months, the story was about inevitable institutional adoption. The ETF was the golden ticket. Now, the narrative hits a speed bump. Liquidity is flowing out, challenging the assumption of a one-way street into digital assets. It turns out institutions can be just as fickle as any retail trader, often just with better PowerPoints and higher fees.

What's Next for the Market?

This pullback creates a fascinating tension. Is this a healthy correction that shakes out weak hands, or the start of a deeper de-risking cycle? One thing's certain: the market's next move will depend on whether this outflow is a pause or a precedent. For now, the institutions have spoken—with their wallets.

In brief

• Institutional involvement in Bitcoin and Ethereum ETFs has been declining, with the 30-day moving average showing consistent net outflows.
• Activity from large investors and declining ETF balances from previous peaks have slowed Bitcoin’s price recovery and limited short-term gains.
• Certain funds like BlackRock’s iShares Bitcoin Trust still attract money on specific days, maintaining significant holdings despite the overall market pullback.

Institutional Outflows Persist

Glassnode highlighted that the 30-day moving average of net flows into U.S. spot Bitcoin and ethereum ETFs has turned negative and remained at that level. The sustained trend points to a phase of limited participation and partial disengagement by institutional investors, reinforcing an overall contraction of liquidity in the crypto sector.

ETF flows have declined since mid-October, a movement that tends to follow spot market trends. These funds often indicate institutional investor sentiment, which has played a significant role in shaping the crypto market this year. At present, sentiment appears more cautious, reflecting the broader slowdown across markets.

The Kobeissi Letter reported on Tuesday that selling pressure in crypto ETFs has returned. Last week, these funds recorded $952 million in withdrawals, marking six weeks of outflows over the past ten. Ethereum ETFs led with $555 million, followed by Bitcoin funds at $460 million, indicating ongoing capital movement from these funds.

The trend has continued into this week. Data from SoSoValue shows that institutional activity remained uneven:

• Bitcoin experienced outflows of $142.19 million on Monday and $188.64 million on Tuesday.
• Ethereum posted a modest inflow of $84.59 million on Monday that quickly turned into an outflow of $95.5 million on Tuesday, reflecting unstable institutional support.

Whale Activity and ETF Drawdowns Limit Bitcoin Recovery

This persistent withdrawal reflects broader selling pressure identified by CryptoQuant, which linked Bitcoin’s slow recovery to activity from large investors. ETF drawdowns from their all-time highs, along with ongoing whale selling since October, have weighed on Bitcoin’s price momentum and limited its near-term upside.

Despite overall outflows, BlackRock’s iShares Bitcoin Trust (IBIT) recorded modest inflows on certain days. Farside Investors reported $111.2 million on 17th December and $32.8 million on 18th December. Since its launch, the fund has amassed $62.34 billion, maintaining its status as the largest spot Bitcoin ETF and outperforming competitors in total holdings.

Eric Balchunas, Bloomberg’s senior ETF analyst, noted that IBIT is the only ETF on Bloomberg’s “2025 FLOW Leaderboard” showing a negative return this year. Yet, the fund ranked sixth in inflows and attracted more investment than SPDR Gold Shares (GLD), which increased by 64% over the same period, highlighting its continued appeal despite the overall market weakness.

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