US spot Bitcoin ETFs experienced a significant $649 million outflow on May 18, while Ethereum ETFs continued their six-day streak of outflows with another $86.31 million withdrawal, according to data tracked by SoSoValue. The Bitcoin outflow represents a substantial single-session withdrawal that demands attention even in a market accustomed to sudden swings in institutional appetite. While the Bitcoin outflow isn't a record, it lands at a time when ETF inflows had already been flattening, with traders treating daily flow data as a sentiment proxy. The size suggests systematic repositioning rather than isolated rebalancing, with the six-day streak in Ethereum funds pointing to a persistent shift in institutional positioning.
According to a research note from JPMorgan analysts led by managing director Nikolaos Panigirtzoglou, Ethereum and the broader altcoin market may continue to underperform Bitcoin unless there is meaningful improvement in network activity, decentralized finance adoption and real-world applications. The bank traces the current divergence back to the October 2025 deleveraging, when a sharp geopolitics-driven selloff triggered heavy liquidations in ETH products relative to BTC, particularly among systematic and crypto-native traders. Since then, spot Bitcoin ETFs have recovered roughly two-thirds of their outflows during the October 2025 drawdown, while spot Ether ETFs have only clawed back about one-third of their redemptions over the same period. As reported by JPMorgan, this underperformance trend that started in 2023 is unlikely to change unless we see meaningful improvements in network activity, DeFi and real-world applications.
CME futures data reveal stark differences in institutional positioning between the two assets. Institutional Bitcoin exposure on regulated futures has nearly fully restored to pre-selloff levels, while ETH futures open interest and net long positioning remain well below earlier peaks. Momentum-driven players such as commodity trading advisors and quant funds are described as slightly underweight both assets, but the underweight is more pronounced in ETH, reflecting the heavier deleveraging it endured last October. The bank notes that Bitcoin has benefited from a perception as the safer macro and regulatory bet within the crypto complex, with CME futures positioning in bitcoin sitting close to pre-crash levels while ether has yet to catch up. Recent market data shows that BitMine Immersion Technologies recently disclosed a $151 million purchase of 71,672 ETH, viewing levels below $2,200 as an attractive opportunity for long-term treasury holdings, providing some counterbalance to the institutional selling pressure.
Despite the ETF outflows, speculative capital remains active in certain altcoins, with $TON surging over 83% and $VVV climbing more than 62% during the same period, illustrating that speculative capital is still very much active. This divergence suggests ETF outflows aren't about a broad crypto exodus but rather a specific reconsideration of the fund structure and the strategies it serves. The tokenization sector has just crossed $20 billion in on-chain value, with players like Ondo and JPMorgan settling live Treasury transactions, creating competition for ETF products that don't capture staking rewards. The ETF product's pure beta nature becomes less attractive when tokenized Treasury funds and other real-world asset instruments are on the rise, with institutions weighing Bitcoin ETFs against regulated on-chain Treasury funds earning yield.
The May 18 outflows may be a direct expression of regulatory uncertainty, with banking interests pushing to undo key compromises just four days before a Senate vote on a landmark crypto bill. When legislative certainty gets yanked away at the last minute, ETF flows tend to react, with some allocators choosing to reduce exposure rather than ride out the uncertainty. The crypto ETF complex exists inside a regulatory framework that still feels provisional to many institutional buyers. The next few sessions will determine whether this was a transient event or the start of a more sustained exit, with market makers and authorized participants likely to adjust their hedging if outflows continue at this scale, potentially thinning spot order books.
