U.S. Crypto Demand Slumps as BTC, ETH ETFs See Outflows

The retreat of U.S. investors from cryptocurrency markets is most evident in the exchange-traded fund (ETF) space, where outflows have become dominant. According to CryptoQuant’s analysis, spot Bitcoin ETFs are experiencing one of their weakest performances since April, with the seven-day average net outflow standing at 281 BTC, equivalent to $30.6 million in negative flows. This marks a significant reversal from the accumulation patterns seen during previous market enthusiasm periods.

The Ethereum ETF market tells a similar story of declining interest. Since mid-August, inflows into Ethereum ETFs have progressively slowed and are now hovering near zero. This stagnation in both Bitcoin and Ethereum ETF products indicates that institutional and retail investors alike are taking a cautious approach, with CryptoQuant data clearly pointing to profit-taking behavior rather than renewed accumulation. The current ETF outflow patterns suggest that these investment vehicles acted as net sellers of Bitcoin last week, contributing to the overall market pressure.

The derivatives market provides further evidence of the cooling sentiment among U.S. investors. The Chicago Mercantile Exchange’s (CME) futures annualized basis for Bitcoin has plummeted to 1.98%, representing the lowest level in over two years. Similarly, Ethereum’s futures annualized basis has declined to 3.0%, marking the lowest reading since July 29. These metrics indicate that demand for Bitcoin and Ethereum futures with expiration dates six months or longer has significantly decreased as both assets have retreated from their recent highs.

The declining futures basis across both major cryptocurrencies suggests that institutional traders are reducing their long-term exposure and hedging activities. This trend in the derivatives market typically signals reduced confidence in near-term price appreciation and reflects a broader risk-off sentiment among market participants. The simultaneous weakness in both Bitcoin and Ethereum derivatives indicates that the current cautious approach is affecting the entire digital asset ecosystem rather than being isolated to a single cryptocurrency.

Spot market indicators provide additional confirmation of the demand slowdown among U.S. investors. The Coinbase price premium, which measures the difference between prices on the U.S.-based exchange and global averages, has fallen close to zero for the first time since September 8. Positive Coinbase premiums typically signal stronger U.S. demand growth, making the current decline a significant indicator of weakening domestic appetite for cryptocurrency exposure.

This decline in the Coinbase premium coincides with the broader market pullback following September’s rally that drove Bitcoin to $126,000 and Ethereum to nearly $5,000. The current market environment represents a stark contrast to the enthusiasm seen during that period, when investor appetite for exposure to both BTC and ETH increased substantially. CryptoQuant’s comprehensive analysis indicates that all metrics across spot, futures, and derivatives markets collectively point to profit-taking behavior rather than new accumulation, suggesting market participants are awaiting fresh catalysts before re-engaging with risk assets.

The current market dynamics represent a significant shift in investor behavior following the late September rally. Both retail and institutional investors in the United States have transitioned from accumulation to caution, with CryptoQuant data indicating that this sentiment spans across all market segments. The synchronized weakness in spot markets, ETF flows, and derivatives activity suggests a comprehensive reassessment of risk exposure among U.S. market participants.

The data collectively points to investors waiting for new catalysts before re-entering the risk market, reflecting a more measured approach to cryptocurrency investment. This period of consolidation and profit-taking follows the substantial gains recorded in September and indicates that market participants are becoming more selective in their exposure decisions. The current environment underscores the importance of monitoring multiple market indicators—from ETF flows to derivatives metrics and exchange-specific premiums—to gauge the true sentiment shift among U.S. cryptocurrency investors.