US Spot Ether ETFs Shed $1.1 Billion in Three Weeks as Outflows Persist

What Happened

Investors have withdrawn about $1.1 billion from U.S. spot Ether exchange-traded funds over the last three weeks, according to a Yahoo report published October 24, 2026, and the selling has not stopped. The figure covers the combined flows of the funds that hold Ether directly rather than through futures contracts.

The report also ties the outflow to Coinbase (NASDAQ: COIN), which serves as custodian for most of the U.S. spot Ether ETFs. Custody is the business of holding the underlying coins on behalf of a fund, keeping them segregated and accounting for them, rather than trading them.

The development matters beyond crypto specialists because spot Ether funds are now one of the main ways American brokerage customers get exposure to the asset inside ordinary accounts. When money leaves those funds at this pace, the effects show up in the price of Ether, in the revenue of the companies that service the funds, and in the trading activity of the exchanges where the coins change hands.

Why Redemptions Reach the Coin Market

A spot Ether ETF is structured differently from a fund that owns shares of stock. The fund holds actual Ether. Authorized participants, typically large trading firms, create new fund shares by delivering Ether to the custodian, and redeem shares by taking Ether back out. Retail investors buying and selling the ETF on an exchange are one step removed from that process, but their aggregate buying and selling drives it.

When redemptions exceed creations, the mechanics push coins back into the market. As the report notes, these funds directly hold Ether, so when investors withdraw, the funds often have to sell coins to meet demand. That selling is what connects a flow number reported for ETFs to the price quoted on crypto exchanges.

This is the same plumbing that applies to spot Bitcoin funds, and it is why flow data is watched so closely by people who follow these products. A sustained run of outflows is not simply a sentiment reading. It represents actual supply arriving in the market, and it can weigh on prices independently of whatever else is happening in crypto that week.

The reverse is also true. In periods when creations outnumber redemptions, the funds absorb coins rather than release them. Flow data therefore functions as a rough measure of whether the ETF wrapper is pulling supply off the market or adding to it.

Coinbase's Exposure as Custodian

Coinbase occupies an unusual position in this market. It is a publicly traded U.S. company, listed on Nasdaq, and it is also the custodian for most of the U.S. spot Ether ETFs, according to the report. That makes it a counterparty to the funds themselves rather than merely a venue where individuals trade.

Custody arrangements typically generate fee revenue tied to assets held, so the size of the assets in these funds matters to the custodian. The report states that the outflow situation has significantly impacted Coinbase, without providing a specific financial figure for that impact.

For American readers who hold Coinbase shares, directly or through a fund, this is the relevant link. The company's results are sensitive to crypto trading activity and to the asset levels it safeguards, and a three-week stretch of redemptions touches both. The report does not quantify the effect on Coinbase's earnings or revenue, and no company statement on the flows is included in the source material.

What Would Bring Buyers Back

The question in the report's headline is the one that matters for anyone watching these funds, and there is no settled answer. What can be said is what the mechanism responds to.

Flows into a spot crypto fund depend on demand for the underlying asset through that particular wrapper. Buyers return when the case for holding Ether improves relative to the alternatives, or when the ETF itself becomes a more attractive way to hold it than the available substitutes, such as buying the coin directly on an exchange or holding shares of companies with crypto exposure.

• Redemptions ease when the selling that produced them runs its course, which is a description of the mechanism rather than a forecast about timing.
• Creations resume when buyers choose the fund wrapper over direct ownership, which depends on the convenience, custody and account type the fund offers.
• The custodian's fortunes move with the asset levels it holds, so a turn in flows would change the picture for Coinbase as well.

None of this implies a date. The report does not forecast when outflows will stop, and it does not identify a catalyst that would reverse them. Anyone treating a specific level or event as the turning point is going beyond what the reporting supports.

What to Watch

For U.S. readers, the practical signal is the daily and weekly flow data published for these funds. That data is the clearest public record of whether the ETF wrapper is absorbing Ether or releasing it, and it arrives before the effects show up in custody revenue or exchange volumes.

The second signal is Coinbase's own disclosure. As a Nasdaq-listed company, it reports results on a quarterly schedule and discusses its business in filings and calls. The report does not say when the next update is due or what management has said about ETF custody revenue, so the specifics will have to come from the company itself.

The third is the price of Ether, which is where the coin sales described in the report ultimately register. A flow figure of about $1.1 billion over three weeks is a measure of investor behavior in one set of products. It is not a statement about the asset's long-term value, and it does not tell a reader what to do with an allocation.

What it does show is that the spot Ether funds, which were built to give American investors a regulated route into the asset, are currently being used in the other direction. Money is leaving, coins are being released to meet it, and the custodian that holds most of those coins is exposed to the trend. Whether that continues is the open question the reporting leaves standing.

Source: Yahoo

This article is for information only and is not investment advice, a recommendation, or an offer to buy or sell any security. Figures are sourced from third-party market data providers and may be delayed. Do your own research before investing.