Ethereum ETFs Have Lost $1.1 Billion in Three Weeks. What Would Bring Buyers Back?

Over the past three weeks, U.S. spot Ethereum (ETH) exchange-traded funds (ETFs) have seen a significant outflow of approximately $1.1 billion, a trend that shows no signs of reversing. This mass withdrawal has also adversely affected Coinbase, which acts as the custodian for many of these ETFs. As of October 23, 2026, Coinbase's stock closed at around $164, marking a 17% decline over the past month. Investors are now left wondering what could entice them back into the market.

According to data from SoSoValue, Ethereum spot ETFs have consistently lost funds, with net outflows totaling $542.1 million from October 5 to 9, followed by an additional $320 million from October 12 to 16. The trend continued, with another $225 million withdrawn in just four trading days from October 19 to 22, including a notable $110.5 million on October 22 alone. The total figures for October 23 are still pending.

One fund has been particularly responsible for the majority of these withdrawals. BlackRock’s iShares Ethereum Trust (ETHA) experienced about $1.01 billion in outflows during this period, which represents approximately 93% of the total withdrawals. Its net assets have dropped from around $9.9 billion on October 5 to about $7.8 billion by October 23, when it recorded zero inflows. Between October 19 and 22, ETHA alone accounted for $233 million in withdrawals, exceeding the total outflow of $225 million for all funds during the same timeframe. This indicates that while some investors are pulling out of ETHA, others are reallocating their investments to different Ethereum ETFs, keeping their capital within the Ethereum ecosystem.

Three main factors appear to be driving investors away from Ethereum ETFs. First, the competition from staking options has become more appealing. Investors can lock up their ETH to help secure the network in exchange for rewards, which staking funds distribute to shareholders. BlackRock also offers the iShares Staked Ethereum Trust ETF, thus creating competition between traditional Ether funds and income-generating options.

Second, the decline in ETH prices has been a significant concern. The cryptocurrency has lost 11.5% in value throughout October, trading around $2,361 and down 20% year-to-date. Such price drops can lead to ETF redemptions, generating a cycle of further selling pressure.

Lastly, delays in development have exacerbated the situation. On October 22, Ethereum developers announced a postponement of the Glamsterdam upgrade's test on the Hoodi network, which was originally set for October 26. The Ethereum Foundation stated that additional time is required to evaluate how the proposed changes interact with existing smart contracts. The lack of a new timeline represents another setback for ETH holders who are eager for immediate positive developments.

Despite the outflows, Ethereum ETFs still maintain $14.6 billion in net assets, compared to $12.7 billion in total net inflows. This discrepancy exists because the price of ETH has increased since many of those investments were made, allowing early investors to still realize profits despite recent downturns.

Coinbase, which benefits from both custody services and ETH staking, is particularly affected by a decline in Ethereum demand, as it directly impacts its revenue streams. In its second-quarter earnings report released on July 30, Coinbase reported an 18.5% year-over-year drop in revenue to $1.22 billion. Additionally, platform assets decreased from $294 billion to $246 billion, with executives pointing to ETF outflows as a contributing factor. Alesia Haas, Coinbase’s chief financial officer, noted, “When customers store with us, they transact with us,” highlighting the reciprocal relationship between stored assets and trading revenue. Over the last week, Coinbase's stock has declined by 5%, and it is down 27.3% year-to-date.

Large transactions have also drawn scrutiny, with Whale Alert reporting significant transfers such as 38,236 ETH, valued at $91.7 million, moving into Coinbase Institutional, and another 37,568 ETH, worth $90 million, shifting from Coinbase Institutional to regular Coinbase. While incoming coins might signal selling intentions, many such internal transfers are routine custody actions.

To entice buyers back into Ethereum ETFs, a rebound in ETH prices could be crucial. Historically, ETF flows have closely mirrored price movements. Despite recent challenges, ETH has gained 21.6% over the past 90 days, suggesting that a price recovery could reignite investor interest. Additionally, more ETFs offering staking options may attract yield-seeking investors, allowing them to maintain their investments in Ethereum.

Furthermore, progress on the Glamsterdam upgrade could bolster confidence if a new date is announced. Interestingly, weekly outflows have shown a sharp decline, dropping from $542.1 million to $320 million and then to $225 million, indicating that buyers may be ready to return. If this trend shifts to a week of net inflows while ETH stabilizes, Coinbase's upcoming quarterly report could reveal the true effects of the ETF selling trend.