U.S. Ethereum funds see $1.45 billion in outflows in October through Oct. 29
Key Facts
Net outflows from U.S. spot Ethereum funds totaled about $1.45 billion in October through Oct. 29, the largest monthly total since the funds launched, according to a CoinMarketCap report. Funds saw net outflows in 18 of 21 trading sessions during the period, extending withdrawals from products tied to the cryptocurrency. The decline followed two months of positive flows, as investors added about $2.7 billion to the funds in August and September while Ether rose. On Oct. 29, the cryptocurrency closed near $2,249, its first close below $2,300 since August, the report said. It also fell about 17% over the 30 days through Oct. 30, nearly twice Bitcoin’s monthly decline.
Daily flows briefly reversed on Oct. 21, when the funds recorded a net inflow of $14.9 million, following a net outflow of $26.1 million the previous day, according to Farside Investors data. The positive flow did not end the withdrawals; the data showed net outflows in every session from Oct. 26 to Oct. 30. Outflows totaled $88.6 million on Oct. 26, followed by $60.2 million on Oct. 27 and $21.4 million on Oct. 28. They widened to $105.5 million on Oct. 29, before reaching $155.7 million on Oct. 30. The ETHA fund was the largest single source of outflows in the Oct. 30 session, with $76.6 million withdrawn.
A comparison with the start of the month shows that withdrawal pressure predated October’s final days. An Investing.com article on Oct. 9 said U.S. spot Ether funds recorded net outflows of $641 million between Sept. 29 and Oct. 8, across eight consecutive sessions. That followed a 48% rise in the cryptocurrency from its Aug. 14 close to a peak of $2,777.33 on Oct. 2, the same article said. By Oct. 7, Ether had fallen 7.8% from that peak, or $215. Liquidations of Ether perpetual futures positions totaled $232.67 million over the 24 hours through Oct. 7, with long positions accounting for 95.06% of the total, according to Investing.com. These figures put the price correction and position liquidations in the context of heightened volatility early in the month, while fund flows remained a separate measure of money movement.
The CoinMarketCap report linked Ether’s weak performance to a decline in returns from the fund-futures arbitrage strategy, as the strategy became less attractive to investors. The premium on December Ether futures at CME was about 5% annualized on Thursday, Oct. 29, approaching the yield on three-month Treasury bills. The report said leveraged funds cut their net short positions by about half between late September and Oct. 20. This points to a reduction in the scale of bets on the arbitrage strategy during the period, alongside the wave of fund outflows. Futures premiums remained near the yield on short-term bills, limiting the spread on which the strategy relies, the report said.
EL7 data confirms that Ether continued to close below $2,300 at month-end, recording $2,253.13 on Oct. 29 and $2,245.54 on Oct. 30. The closing price in EL7 data differs from the approximate $2,249 figure cited by the CoinMarketCap report for the Oct. 29 session. As for fund flows, net outflows totaled $155.7 million on Oct. 30, following five consecutive days of outflows across the sessions from Oct. 26 to Oct. 30. The latest figures follow CoinMarketCap’s report on record outflows through Oct. 29, while Farside continues to record daily flows after that date. 21Shares said in a filing with the U.S. Securities and Exchange Commission that extending the fee waiver by an additional 12 months aims to provide low-cost exposure to Ethereum with the potential for staking returns, and applies automatically to current and future shareholders.