Ethereum ETF volatility persists as BlackRock BUIDL grows

September flows hit a wall

I see massive swings in Ethereum ETF flows this month. On September 11, Ethereum spot ETFs pulled in $216.4 million in net inflows. BlackRock’s ETHA led that day with $149 million, which was almost 70% of the total $216.4 million captured by Ethereum spot ETFs that day. The market reversed quickly. On September 17, U.S. spot Ethereum ETFs recorded net outflows of $39.3 million, which followed net outflows of $142 million on September 15 and $224.1 million on September 16. These three days of selling totaled $405.4 million in cumulative outflows. BlackRock’s ETHA led those September 17 outflows with $42.9 million. During the same session, spot Bitcoin ETFs saw $159.5 million in net inflows. I find this sudden exit of capital from BlackRock’s main Ethereum product quite jarring. Ethereum’s volatility in the current period follows a massive 40.5% price surge in July. Even when Ethereum showed strength in July, such as when it saw $318.7 million in net inflows, the momentum has proven fragile. In August, BlackRock’s ETHA saw $112.8 million in outflows over five days. The year to date inflows for spot Ethereum ETFs total $6.4 billion, while ETH trades near $2,503 with a $232 billion market capitalization.

Tokenization drives institutional interest

The expansion of tokenized assets provides a different angle on Ethereum’s value. BlackRock’s BUIDL fund surpassed $1 billion in assets under management in March 2025. This fund provides yields on tokenized U.S. Treasuries. It uses the Ethereum blockchain for issuance and trading. The total market for real-world assets reached $12.45 billion. Ethereum accounts for almost 50% of the total volume for tokenized Treasury products. The Franklin Templeton OnChain U.S. Government Money Fund has been available since April 2021 and manages over $400 million. Ondo Finance’s USD Yield fund launched last August and currently holds $281 million. These figures show how institutions use the network for treasury management. The market for these assets expanded by over 130% since the beginning of the year. Securitize acts as the transfer agent and tokenization platform for the BUIDL fund. The fund is a tokenized 506(c) money market fund. It invests 100% of its total assets in cash, U.S. Treasury bills, and repurchase agreements. BNY Mellon is the custodian for the fund’s assets.

Staking yields beat simple holding

I notice a massive preference for staking-enabled products. BlackRock’s ETHB gathered more than $650 million since its launch. ETHA gathered only $85 million this year. ETHB provides rewards because it stakes 77% of its holdings. The fund’s net rewards rate is 1.72%. BlackRock keeps 18% of the rewards as a fee. This yield makes ETHB attractive when compared to ETHA, which has $8.6 billion in assets but lacks staking. Grayscale’s products also participate in this trend. Grayscale’s ETH holds $2.2 billion, while its ETHE holds $1.9 billion. Fidelity’s FETH holds $1.4 billion. Franklin’s EZET has $66 million in net inflows. Invesco’s QETH has $25 million. 21Shares’ TETH has $29 million. I find the concentration of ETHA’s volume concerning. The market lacks diversity across issuers. Do institutions eventually abandon non-staking funds for higher yields?