Bitcoin ETFs Bleed $126.7M in First Weekly Outflows Since June — Is “Rektember” Imminent?

U.S. spot Bitcoin exchange-traded funds (ETFs) recorded their first weekly outflows since June, raising questions over whether September, historically one of Bitcoin’s weakest months, could bring further pain for investors.

According to data from SoSoValue, on August 29, spot Bitcoin ETFs saw net redemptions of $126.64 million, snapping a six-week streak of consistent inflows.

The withdrawals reduced total assets under management to $139.95 billion, representing 6.52% of Bitcoin’s market capitalization.

Despite the setback, cumulative inflows since launch remain strong at $54.24 billion, showing the scale of institutional participation.

Fidelity’s Wise Origin Bitcoin Fund (FBTC) posted the steepest daily outflow with $66.2 million, followed by ARK Invest and 21Shares’ ARKB with $72.07 million.

Grayscale’s GBTC, which continues to bleed capital as investors rotate into lower-cost funds, lost a further $15.3 million.

BlackRock’s iShares Bitcoin Trust (IBIT) bucked the trend, adding $24.63 million in new inflows and extending its dominance as the largest Bitcoin ETF with $80.98 billion in assets.

August marked a clear reversal from earlier bullish momentum. The month closed with $751.1 million in total outflows, compared with inflows of $6 billion in July and $4.6 billion in June. The only other red month this year was April, when ETFs lost $767.9 million.

Analysts suggest the latest drawdowns reflect profit-taking and a broader market correction following the strong summer rally.

Ethereum ETFs also faced headwinds on August 29, recording $164.64 million in daily outflows, halting a five-day inflow streak that had added more than $1.5 billion to the asset class.

Fidelity’s FETH and Grayscale’s ETHW bore the brunt, shedding $51 million and $61 million, respectively, while Grayscale’s flagship ETHE lost $28.6 million.

Despite the downturn, cumulative inflows into Ether ETFs remain positive at $13.5 billion, with BlackRock’s ETHA accounting for $13.1 billion of that total.

The divergence between Bitcoin and Ethereum ETF flows has been notable in recent months.

While Bitcoin ETFs have attracted $54.6 billion in net inflows since their January 2024 launch, Ethereum ETFs, which began trading six months later, have already secured $13.7 billion.

More strikingly, August saw Ethereum products outperform with nearly $4 billion in inflows, compared with Bitcoin ETFs’ $622.5 million in net outflows.

This shift coincided with Ether’s relative price strength. Since mid-July, ETH has erased its year-to-date underperformance against Bitcoin, climbing to a 13.8% gain versus the top cryptocurrency.

Analysts attribute the move to the arrival of Ether ETFs, which have concentrated investor demand into highly liquid, low-fee products.

Still, both assets face mounting uncertainty as September begins. Bitcoin closed August at $109,000, down 6% for the month.

Historical data shows the cryptocurrency has averaged a 3.77% decline in September since 2013, earning the month the nickname “Rektember” among traders.

Market watchers are eyeing key levels between $112,000 and $115,000 as potential support; a failure to hold could see prices retreat toward $103,000, which would threaten $3.28 billion in leveraged long positions.

Despite the recent turbulence, liquidity across crypto ETFs remains robust. Spot Bitcoin ETFs alone recorded $4.31 billion in daily trading volume on August 29, with IBIT accounting for more than half.

Notably, according to today’s report from CoinShares, digital asset investment products rebounded strongly from the prior week’s withdrawals, recording US$2.48 billion in inflows.

That pushed August’s total inflows to US$4.37 billion and lifted year-to-date commitments to US$35.5 billion.

Momentum was broadly positive through most of the week, but flows flipped negative on Friday after U.S. Core PCE inflation data dampened expectations of a September Federal Reserve rate cut, weighing on sentiment and contributing to a 10% slide in total digital asset AUM to US$219 billion.

The United States remained the dominant driver, with US$2.29 billion in inflows, though Switzerland, Germany, and Canada also contributed, bringing in US$109.4 million, US$69.9 million, and US$41.1 million, respectively.

Analysts suggest Friday’s reversal was more likely profit-taking than the start of a wider downturn, given the breadth of regional support.

Ethereum continued to outshine Bitcoin, pulling in US$1.4 billion compared with Bitcoin’s US$748 million. For the month, Ethereum secured US$3.95 billion of inflows, while Bitcoin posted US$301 million in outflows.

Among altcoins, Solana and XRP drew US$177 million and US$134 million, respectively, buoyed by optimism over potential U.S. ETF approvals.

That optimism is underpinned by a swelling backlog of ETF applications. According to Bloomberg Intelligence analyst James Seyffart, 92 crypto ETFs are currently pending with the U.S. Securities and Exchange Commission, up from 72 in April.

The bulk of new filings focus on Solana, XRP, and Litecoin, with Solana leading at eight applications and XRP close behind at seven. Final deadlines for many of these products cluster in October, intensifying speculation that approval could trigger fresh capital inflows and potentially kick-start an “altseason.”

Still, Bitcoin’s technical signals suggest caution. Analysts point to a bearish “death cross” on the Market Value to Realized Value (MVRV) momentum indicator, last seen in late 2021 before the cryptocurrency’s slide to $15,500.

Despite climbing to an all-time high of $124,500 earlier this year, the weakening MVRV trend signals waning capital inflows.

If history rhymes, some warn Bitcoin could face a deeper correction, with targets as low as $105,000, or even $60,000 if bearish momentum accelerates.

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