TLDR
- BlackRock sold $151 million in Ethereum and bought $290 million in Bitcoin on September 3, 2025.
- Bitcoin ETFs attracted $332.7 million in weekly inflows, while Ethereum funds experienced outflows.
- There is an 87% probability of Federal Reserve rate cuts boosting institutional Bitcoin interest.
- BlackRock’s Bitcoin ETF holds $58 billion compared to $13 billion in its Ethereum fund.
- Despite the institutional reallocation, both cryptocurrency prices fell.
On September 3, 2025, BlackRock executed a significant reallocation in its cryptocurrency portfolio, liquidating a substantial $151 million in Ethereum while simultaneously acquiring $290 million in Bitcoin. This move by the world’s largest asset manager signals a noteworthy shift in institutional sentiment towards digital assets, particularly reflecting a preference for Bitcoin over Ethereum.
Data from ETF flows corroborate this trend, revealing that BlackRock’s iShares Ethereum Trust (ETHA) faced $151.39 million in outflows on the same day, in stark contrast to its iShares Bitcoin Trust (IBIT), which saw an influx of $289.84 million. The alignment of these figures, supported by Arkham Intelligence’s blockchain data, highlights that BlackRock’s strategy is driven by proactive reallocations rather than mere market fluctuations.
Notably, this shift reverses the momentum Ethereum had built during August, where it captured $3.87 billion in new investments, while Bitcoin funds experienced a loss of $751 million for the same period. As we transitioned into September, Bitcoin ETFs dominated the investment landscape, reporting $332.7 million in inflows by September 2. Fidelity’s Bitcoin ETF led the charge with a notable addition of $132.7 million, while BlackRock’s iShares Trust added another $72.8 million prior to the major purchase.
Fed Rate Cut Expectations Fuel Bitcoin Rally
The anticipation surrounding Federal Reserve rate cuts has surged, with analysts estimating an 87% probability for such a decision in the upcoming September meeting. This dovish outlook has spurred renewed interest in Bitcoin among institutional investors. Often viewed as a hedge against inflation, Bitcoin is increasingly positioned as a “digital gold” alternative when traditional yields are expected to decline.
Lower interest rates typically invigorate demand for risk assets, including cryptocurrencies. Recent flows into Bitcoin ETFs highlight this sentiment, with $507.5 million in weekly inflows partly driven by expectations of a Fed easing. Institutional money managers are increasingly perceiving potential rate cuts as a positive factor for Bitcoin’s long-term value proposition, making it an even more appealing investment.
Crypto Prices Drop Despite Positive Flows
Curiously, despite the positive institutional flows into Bitcoin and the substantial reallocation by BlackRock, both Bitcoin and Ethereum experienced price drops following the portfolio adjustments. On September 3, Bitcoin saw a decline of 2.09%, settling at $109,422, while Ethereum fell 3.29% to $4,306. This price action suggests that short-term selling pressures may have outweighed the positive impacts of ETF demand and institutional interest.
This sudden dip could reflect market participants taking profits after recent advances or a reaction to BlackRock’s notable change in strategy. As BlackRock’s Bitcoin ETF continues to grow, it now holds a staggering $58 billion in assets compared to the $12.97 billion in its Ethereum fund, indicating a widening performance gap between these two cryptocurrencies.
Elsewhere in the Ethereum landscape, other ETFs showed mixed results. While Fidelity’s FETH gained $65.78 million and Bitwise’s ETHW added $20.81 million, these inflows were overshadowed by BlackRock’s significant outflow. Such movements signal a shift in institutional focus, which may have long-lasting implications for both assets.
The September 3 reallocation marks one of the most substantial single-day ETF movements of 2025. Previously, BlackRock had invested $300 million into Ethereum, making this $151 million sale an unmistakable reversal of strategy. Despite this, both cryptocurrencies maintain robust yearly performances, with Bitcoin up over 90% and Ethereum achieving a notable 77% increase. However, the growing institutional preference increasingly tilts in favor of Bitcoin, highlighting its established market position amidst evolving dynamics in the crypto space.
