Ethereum is under extreme FUD right now, and institutional exits led by Harvard University have soured the altcoin’s market sentiment even further.
Notably, Harvard University Endowment Fund is in the headlines for dumping its entire ETH holdings of $86.8 million via BlackRock’s iShares Ethereum Trust Fund (ETHA).
This was a stark difference from its BTC holdings, which were only trimmed by 50% from $265M to around $117 million on a quarter-on-quarter basis, as per recent 13F filings. In other words, the university fund is more bullish on BTC’s future performance than on ETH.
For traders, this suggested that the university might not be expecting a strong upside from ETH in the medium term.
What’s next as capital exits ETH?
Worth pointing out, however, that Harvard was not the only one that exited ETH. According to 13F filings, BlackRock’s ETHA, the largest Spot ETH ETF, saw a 5% drop in institutional ownership in Q1.
Surprisingly, the redemptions didn’t stop in Q1. Fund flows data aggregated by TradingView showed that ETHA has bled $922 million (nearly $1 billion) on a year-to-date (YTD) basis. In the past month alone, BlackRock’s ETHA saw $239 million in redemptions.
But that translates to about $485 million, which has exited the BlackRock ETH ecosystem since the new staked fund (ETHB) has attracted $515 million on a YTD basis.
Even so, the broader ETH funds are still under pressure. In fact, CoinShares showed that the funds lost $249 million over the past week, bringing month-to-date (MTD) redemptions to $73M.
ETH market fear deepens
Part of the market sentiment has soured over reports of the Ethereum Foundation’s top researchers’ exits.
Besides, Ethereum’s return to a deflationary path has been elusive, with L2s dominating transactions over the mainnet. For instance – Grayscale had proposed capping staking rewards to improve ETH’s attractiveness as a store of value.
The weak sentiment has now dropped to a “fear” level of 28. For FundStrat’s Tom Lee, however, the bearish sentiment is due to crypto winter, not recent negative reports.
To me, much of bearish sentiment reflects the disdain and despair seen at the nadir of crypto winter (finger pointing at the lows).
At the time of writing, ETH was trading at $2.1K, down 12% from early May’s high of $2.4K. While such extreme FUD always offers a great buying opportunity, it is still unclear whether the speculated U.S-Iran deal could be the next catalyst for ETH bulls.
Final Summary
- Harvard University Endowment Fund sold its entire ETH ETF holdings in Q1 ,but retained 50% of its BTC exposure.
- The Harvard move has weighed down on the ETH market’s sentiment, partly contributing to the altcoin’s recent 12% pullback.
