Ethereum ETFs face massive redemptions as price decouples from tech stocks

Ethereum ETFs lost $320 million in one week between October 12 and October 16, 2026. This outflow wiped out 62% of the 2026 inflows that the funds collected by their September peak. BlackRock’s iShares Ethereum Trust ETF (ETHA) accounted for 93.4% of these outflows, totaling $299 million. ETHA still holds $8.1 billion in assets. While these recent redemptions look heavy, cumulative net inflows for Ethereum ETFs since launch remain at $12.94 billion. Total net assets for these funds stood at $14.95 billion as of October 16.

The price of Ether fell to approximately $2,433 on October 19, 2026. This price represents an 18.9% decline for the year. In the same period, Bitcoin fell by 6.2%. Ethereum saw much sharper declines than Bitcoin. Over the last month, Ether dropped 8.5% while Bitcoin gained 1%. This performance creates a reason for investors to favor Bitcoin for crypto exposure. The decline in Ethereum net assets also stems from falling prices and investor withdrawals, which together reduced total net assets by about $2.9 billion from the September 21 level.

Institutional investors treat Ethereum differently than Bitcoin. Many firms view Bitcoin as a store of value while they treat ETH as growth exposure tied to DeFi and tokenized applications. Ethereum holds nearly 58% of the tokenized RWA market. The network also accounts for about half of the $311 billion stablecoin market. BlackRock’s BUIDL fund, which operates on Ethereum, approaches $3 billion in AUM. This institutional interest creates a direct demand for ETH that differs from the Bitcoin-driven rotations.

ETH price struggles against Bitcoin dominance

Ethereum faces significant pressure because its price often follows Bitcoin, but the correlation is not constant. In August 2025, Ethereum added 48 new whale addresses holding 10,000+ ETH, compared to Bitcoin’s 13 new whale addresses. This 3.7:1 ratio shows that money managers view ETH as a long-term holding because of its 4-6% annual staking yield. This yield provides a fundamental demand that Bitcoin lacks. However, the current market shows ETH lagging behind. Ethereum’s price declined 39.6% over the past year, which exceeds Bitcoin’s 24.5% decrease.

The technical setup for Ethereum shows weakness. The price broke below a diagonal support trend line and a 0.382 Fibonacci retracement resistance level. ETH recently tested the $2,500 area, which traders use as psychological support. If the price breaks below this zone, it could reach lower support areas. Some analysts expect ETH to stay between $800 and $2,500 by the end of 2026 if a bearish wave count continues. This scenario assumes a bear case where the Glamsterdam upgrade faces delays or deployment bugs.

The decoupling of ETH and BTC also relates to DEX activity. Ethereum’s DEX volume reached $139.63 billion in August 2025. This volume reduced the traditional correlation between BTC and ETH from the 0.7-0.8 range to approximately 0.3-0.5 during peak periods. High DEX volume creates asset-specific momentum that overrides Bitcoin’s institutional flows. Traders watch for RSI divergences and volume spikes to identify when seller exhaustion occurs. Does the current outflow trend suggest a permanent shift in institutional preference?

Divergent behaviors in XRP and Ethereum ETFs

The market shows a clear split between how investors treat Ethereum and XRP. XRP has seen 13 consecutive weeks of positive ETF inflows, even as its price fell toward $1.41. In contrast, Ethereum ETFs experienced nine consecutive days of outflows. XRP ETFs recently attracted $11.3 million in new money. This resilience suggests some investors use price drops to build exposure. Ethereum investors appear more defensive, reacting to macroeconomic risks and recent performance.

The scale of these movements determines their impact. An $11.3 million inflow into XRP does not overcome the massive selling volume on global spot and derivatives exchanges. Ethereum’s $320 million weekly outflow was larger than the $228.6 million loss seen in Bitcoin ETFs during the same week. In percentage terms, Ethereum ETFs lost about 2.1% of their assets, while Bitcoin ETFs lost only 0.2%. BlackRock’s ETHA remains the primary driver of these movements, accounting for the vast majority of the selling.

Institutional engagement for Ethereum continues through new organizations. Ethereum Institutional launched to promote the network among banks and asset managers. The group includes sponsors like BitMine and SharpLink. BitMine holds 5.7 million ETH, representing 4.7% of the total supply. These companies hold large reserves and bet on institutional demand driving a recovery. Standard Chartered’s Geoff Kendrick expects ETH to reach $4,000 by the end of 2026 if commercialization succeeds.

Macro drivers and the path to 2026 targets

Global liquidity and central bank policy influence crypto inflows. Tightening cycles compress risk appetite and reduce capital flows. In the first quarter of 2026, global retail crypto activity fell to $979 billion, a 11% decline from the first quarter of 2025. The United States saw a volume decline of 11%, while Turkey grew by 7% to reach $40 billion. This contraction matches a broader risk-off environment driven by US tariff policy and high real yields.

Ethereum’s roadmap includes the Glamsterdam upgrade, which could serve as a price catalyst. If the upgrade launches in June as expected, it could cut gas fees by 78.6% and lift throughput to 10,000 transactions per second. In a bullish scenario, this upgrade combined with a Bitcoin price above $90,000 could push ETH above $4,000 in the third quarter. This would lead to a year-end price range between $5,000 and $7,500. A bear scenario relies on the upgrade failing or being delayed, which could send ETH toward $1,743.

Regulatory changes like the GENIUS Act of July 2025 provide a framework for stablecoins. This law requires 1:1 reserves in high-quality liquid assets and annual audits. JPMorgan has already used this to launch JPMD on the Base blockchain. The FASB accounting change from January 2025 also allows companies to report crypto holdings at fair market value. These rules help institutions integrate blockchain into traditional finance. If Ethereum maintains its lead in tokenized assets, it may continue to attract capital despite short-term ETF outflows.