Bitcoin Spot ETFs Hemorrhage Cash Amid Stagflation Jitters
Bitcoin spot ETFs have entered a rough patch in early August, suffering sustained outflows for four consecutive days. On August 5, the funds saw $196 million in redemptions, led by Fidelity’s FBTC and BlackRock’s IBIT. This brought total outflows over the four‑day period to roughly $1.26 billion, following $333 million in outflows on August 4 and a weekly tally of $642.9 million for the week ending August 1.
These withdrawals mark the end of a seven‑week streak of inflows and have coincided with notable price weakness, with Bitcoin dropping toward the $112K–$114K range and briefly touching $111,917 by August 3. The ongoing sell‑off reflects growing macroeconomic caution as risk assets remain under pressure.
Ethereum ETFs Defy Trend with Renewed Institutional Inflows
While Bitcoin ETFs face a sharp reversal in sentiment, Ethereum ETFs have emerged as a relative bright spot. On August 5, Ether ETFs posted $73.2 million in inflows, driven by strong activity in BlackRock’s ETHA, VanEck’s ETHV, and other products. This came just one day after Ethereum ETFs recorded $465 million in outflows on August 4, their largest daily withdrawal to date.
Analysts attribute this rebound to recent regulatory clarity, particularly the SEC’s stance that liquid staking does not classify as a security. This development has bolstered institutional confidence, reinforcing Ethereum’s appeal thanks to its staking yield potential and core role in the DeFi ecosystem.
Macroeconomic Concerns Drive Diverging Crypto Sentiment
Broader macroeconomic pressures have weighed heavily on Bitcoin, with fears of stagflation amplifying risk‑off moves across markets. Weak U.S. services PMI data released on August 5 intensified concerns about slowing economic growth paired with stubborn inflation, prompting declines in both equities and cryptocurrencies. The Nasdaq fell, Bitcoin slipped over 1%, and Ethereum dropped 2.4% to trade below $3,600.
The overall crypto market shed approximately $83 billion in value, with major altcoins like XRP, Solana, and meme coins registering declines of 4%–6%. Despite this weakness, Ethereum’s ETF inflows highlight an emerging split in sentiment, with institutional investors showing a greater willingness to allocate to ETH than BTC under current market conditions.
Market Outlook: Key Levels and Institutional Behavior
The divergence between Bitcoin and Ethereum ETF flows signals evolving institutional preferences in the crypto market. Bitcoin remains closely tied to macroeconomic sentiment, making it more sensitive to inflation data, central bank policy, and risk appetite shifts. Ethereum, on the other hand, benefits from its utility in decentralized finance and staking, along with favorable regulatory developments.
For traders, technical levels around $111K–$114K for Bitcoin and $3,600 for Ethereum will be critical in the short term. The continuation of stagflation concerns could prolong ETF redemptions, but any improvement in macroeconomic sentiment or inflow recovery may stabilize prices across the market.
