Bitcoin And Ethereum ETF Flows - Feb 27

Red Flows Amidst Bullish Tailwinds

Author

Nomatic
February 27, 2025

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Feb 27th Update

Recent Ethereum ETF Flows

See the data below from Farside:

($) millions

Looking back over ~2 weeks ETH flows haven’t been great with - $247M net outflows during this time.

ETH flows were slightly positive to neutral for a decent period of time, but the trend is much clearer now.

One small reason for optimism amidst this selloff is the increasing progress being made for staking ETFs. While I don’t expect these to drastically change sentiment, it’s nice that these look to be moving along and on a path to approval. This would allow holders of these ETFs to get exposure to the native yield generated by Ethereum’s Proof of Stake (POS) consensus mechanism:

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Recent Bitcoin ETF Flows

See the data below from Farside:

Bitcoin has had an extremely rough patch of flows this past few weeks with -$3.57B of net outflows.

BTC had only one positive inflow day and the BTC ETFs experienced one of their worst days of outflows on record during this period:

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Other Major Market News:

Regulatory

We should finally be getting major stablecoin legislation this year to the point where Bank of America is considering this:

Almost every major SEC case has either been dropped or ruled in favor of the crypto party lately:

Gemini

Uniswap

Coinbase

Kraken

Robinhood

Consensys (Metamask)

You can make the case that there’s never been a time to be more bullish on crypto than right now.

Sentiment

Even with all these regulatory tailwinds industry sentiment seems incredibly low. How low? Well, this is one of the lowest Fear and Greed scores I’ve ever seen:

To put this into perspective, here’s what this looks like charted over time:

This is one of the lowest sentiment moments since 2022 and 2021

I think Matt Hougan from Bitwise sums this up incredibly well:

Adoption

Check out this clip in the post below from the All-In podcast. This is John and Patrick Collison who founded Stripe talking about the importance of stablecoins and their transformative potential. For those unaware, Stripe is one of the biggest global payments companies and recently bought a major stablecoin infrastructure company called Bridge for $1.1B:

The post below is from Vlad Tenev the founder of Robinhood where he talks about crypto being woven into every fabric of Robinhood going forward:

Conclusion

It was a pretty rough couple of weeks for ETF performance with ETH ETF outflows at $247M and BTC outflows at $3.57B.

One thing I’m a bit guilty of at times when seeing positive inflows is taking them at face value and not always considering the deeper strategies at play. For instance, this is a segment from a long post on X I wrote last week:

The ETFs have introduced a new custody solution. With the advent of these ETFs, I'm finding it increasingly hard to understand what the ETF flows actually mean. Are some flows exiting CEXs for a more trustworthy custodian like Fidelity or Blackrock? Are net inflows into the ETFs even bullish? For instance, when we see net inflows into these ETFs, we don't know the full extent of the position. As in, it could be a hedge fund buying spot and shorting futures to do some sort of carry trade (I guess 13f filings give some insights). Back to the original question, I've seen a lot more Bitcoin maxis saying they've given up self custody as they deem the ETFs as a safer solution. All that to say, I wonder how much of ETF flows are reshuffling of CEX, self-custody and carry trade vs real new buyers? Not trying to be bearish, but has anyone else looked into this further?

The silver lining here on this rough patch of price action is, our industry was losing its way. We had TRUMP, MELANIA, LIBRA and all sorts of depravity happening onchain. There’s a lot of behavior that frankly needed to be culled. I’m hoping this is the splash of cold water that brings our focus back to fundamentals and allows our industry to continue taking steps in the right direction.

I’ll leave you with this post by Jason Yanowitz from Blockworks that really resonated with me:

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