Bitcoin and Ether ETFs bleed as Solana quietly pulls in ‘curious capital’
Spot Bitcoin and Ether ETFs experienced significant outflows, with Bitcoin ETFs losing $578 million and Ether ETFs shedding $219 million on Tuesday, continuing a five-day trend of redemptions attributed to macroeconomic concerns and risk reduction by institutions. In contrast, Solana ETFs gained $14.83 million over six consecutive days of inflows, driven by institutional interest in its yield and growth potential. Experts note Solana's rise as driven by its narrative appeal and unique features, while the broader market remains in a risk-off environment amid tightening liquidity and a strong US dollar.
Layer-1
SEC Alleged Securities
Spot Bitcoin and Ether ETFs Show Continuous Outflows
Spot Bitcoin and Ether exchange-traded funds (ETFs) experienced their fifth consecutive day of outflows on Tuesday. Spot Bitcoin (BTC) ETFs reported a massive $578 million in net outflows, marking the steepest single-day decline since mid-October. BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC were the primary contributors to these withdrawals.
Spot Ether ETFs Face Similar Challenges
Spot Ether (ETH) ETFs also faced significant selling pressure, recording $219 million in net redemptions. Fidelity’s FETH and BlackRock’s ETHA were heavily impacted, extending a five-day selling trend that cumulatively drained nearly $1 billion in capital from Ether-linked ETFs since late October.
Solana ETFs Buck the Trend with Continued Gains
In contrast to Bitcoin and Ether ETFs, Spot Solana (SOL) ETFs maintained a positive trajectory, achieving $14.83 million in net inflows—their sixth consecutive day of gains. Bitwise’s BSOL and Grayscale’s GSOL contributed to this inflow, with institutional investors opting to rotate capital into this newer, yield-bearing product.
Institutional Reactions Amid Rising Macro Concerns
Vincent Liu, chief investment officer at Kronos Research, explained the market dynamics, noting that the outflows reflect a broader sentiment of risk reduction. He said: “Straight days of redemptions show institutions are trimming risk as leverage unwinds and macro jitters rise. Until liquidity conditions stabilize, capital rotation will keep the ETF bleed alive.” The strengthening US dollar and tighter liquidity conditions were also cited as major drivers of this risk-off environment.
Solana's Strength: A Fresh Narrative
Liu further highlighted Solana’s recent success: “Solana’s strength is partly fresh flow meets fresh story, a new ETF with yield appeal pulling in curious capital.” He emphasized that Solana’s attributes, including its speed, staking, and wider narrative appeal, have helped it sustain upward momentum despite macro chaos. However, he also cautioned that Solana’s ETF growth remains niche for now, driven largely by early adopters chasing yield and not indicative of a broader market shift.
Conclusion and Broader Market Implications
The latest trends underscore the diverging paths of major digital assets in the ETF space. While Bitcoin and Ether ETFs suffer from significant outflows amid macroeconomic uncertainties, Solana ETFs stand out as a promising, although niche, opportunity for yield-driven investors. The broader market remains in risk-off mode, awaiting stabilization in liquidity and macro conditions to reverse the current trend.