Crypto ETFs Bleed Nearly $1B as Bitcoin Dips to $112K — Are Analysts Buying the Dip?

The crypto market faced a sharp jolt this week as nearly $1 billion flowed out of U.S. spot Bitcoin and Ethereum exchange-traded funds (ETFs), coinciding with a steep decline in Bitcoin’s price to $112,000.

The massive withdrawals, recorded on Tuesday, marked the second-largest daily outflows for both Bitcoin and Ethereum ETFs this month, underscoring growing investor caution after weeks of volatile price swings.

According to data from SoSoValue, spot Bitcoin ETFs registered $523 million in net redemptions, excluding data from Invesco’s BTCO, which has yet to be published. Fidelity’s FBTC bore the brunt with $246.9 million in outflows, while Grayscale’s GBTC lost $115.5 million.

Funds operated by Bitwise, Ark Invest, and 21Shares also reported significant outflows. BlackRock’s iShares Bitcoin Trust (IBIT), the industry’s largest and most closely watched vehicle, reported zero flows for the day, signaling a pause from the dominant player.

Ethereum ETFs were not spared, with investors pulling $422.3 million in total. Fidelity’s FETH fund recorded the largest single-day loss with $156.3 million in outflows, followed by Grayscale’s ETHE, which shed $122 million.

The Grayscale Mini Ethereum Trust also lost $88.5 million. The redemptions marked the second-heaviest day of outflows for ether ETFs since their launch earlier this year.

The heavy withdrawals come at a time of heightened uncertainty across global markets, with institutional investors trimming risk ahead of key macroeconomic data releases. Bitcoin, which touched a record high of $124,000 just last week, has since tumbled nearly 8%, sliding as low as $112,000 on Wednesday.

The broader crypto market followed suit, shedding 1.5% in value to $3.9 trillion. Ethereum dropped 1.2% to $4,162, while XRP fell 3.2% to $2.90, and Solana also moved lower.

Bitcoin slid under $113K, dragging the crypto market 1.5% lower to $3.9 trillion as traders booked profits ahead of Powell’s Jackson Hole speech.#bitcoin #JacksonHole https://t.co/jWIc1BA34L

Daily flow data highlights the increasingly volatile sentiment. Just last week, on August 14, spot Bitcoin ETFs posted $230.9 million in inflows, their strongest buying activity of the month. Yet, within days, those gains flipped to outflows, including -$121.8 million on August 18 and -$141.4 million on August 15.

Cumulative inflows into Bitcoin ETFs still stand at a strong $54.85 billion, with total assets under management at $150.9 billion. However, that figure is down nearly $5 billion from a peak earlier this month, reflecting the pressure of profit-taking.

Ethereum ETFs have displayed a similar pattern. July and early August saw surging demand, with inflows frequently exceeding $400 million a day and peaking at $729 million on August 13. That surge pushed cumulative inflows from $7.2 billion to over $11 billion in just two weeks, fueling Ethereum’s rally above $4,300.

But since mid-August, the tide has turned, with consecutive days of withdrawals signaling a cooling in sentiment. Even so, cumulative net inflows for Ethereum ETFs remain strong at $12 billion, and daily trading volumes of around $2.7 billion suggest institutions remain heavily engaged in the market.

The turbulence has also spilled into the derivatives market, where overleveraged positions have been wiped out en masse. Data from Coinglass shows that more than 128,000 traders were liquidated in the past 24 hours alone, with total losses reaching $450.7 million.

Total Liquidations today across crypto (data from @coinglass_com)

$429.1m Long Liquidations
$74m Short Liquidations pic.twitter.com/jjrb0W9Gvs

Ethereum led the wipeouts with $175 million in liquidations, while Bitcoin saw $101 million. Long positions accounted for more than $373 million of the total, underscoring the risks of leveraged bullish bets during periods of heightened volatility.

Analysts say the latest correction reflects both the intensity of profit-taking after Bitcoin’s record-setting rally and the natural cooling that often follows surges in institutional inflows.

The Market Value to Realized Value (MVRV) ratio climbed to 21% last week, indicating that most holders were sitting on significant unrealized gains, which in turn created strong incentives to sell.

Despite the consecutive crypto ETF outflow, data from CryptoQuant shows that as of August 17, 2025, the funds collectively hold 1.25 million BTC, the highest on record, underscoring continued institutional demand.

BlackRock’s iShares Bitcoin Trust (IBIT) dominates the sector with 748,968 BTC, or nearly 60% of all ETF-held Bitcoin.

Alongside Fidelity’s FBTC, which holds 199,798 BTC, the two funds control more than three-quarters of the market. Their rapid accumulation has reshaped the competitive landscape once defined by Grayscale.

Grayscale’s GBTC, which at its peak held over 620,000 BTC, now sits at 180,576 BTC. While still relevant, it has been overtaken by Wall Street heavyweights that are setting the pace for institutional adoption. The focus has shifted from monitoring GBTC’s outflows to tracking the buying momentum of IBIT and FBTC.

Meanwhile, Ether ETFs have gained momentum, with Bloomberg analyst Eric Balchunas noting they turned Bitcoin into the “second best” crypto asset in July. He said Ether ETFs packed “a year’s worth of flows into six weeks,” boosted by stablecoin legislation and a clear narrative around Ethereum’s role as a “killer app.”

Ether ETFs Turn Bitcoin Into 'Second Best' Crypto Asset in July.. new from @SirYappityyapp and myself who awarded Ether ETFs as our ETF of the month for July. Normally we just pick one but the whole category caught fire pic.twitter.com/o9yql2hDHM

Still, three straight days of ETF outflows have dampened sentiment. Although small compared with this year’s record inflows, the losses reflect caution amid falling prices. The Crypto Fear & Greed Index flipped to “Fear” on Wednesday with a reading of 45, after spending weeks in “Greed” territory.

Attention now turns to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday. Markets are watching for signals on whether the Fed will cut rates in September, with Powell previously stressing the need for more data on tariffs and inflation.

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