Ether (ETH) exchange-traded funds (ETFs) recorded their largest net outflows since July, with over $79 million exiting on Monday in a sign of waning institutional demand for the world’s second-largest token.

Those figures are the highest since July 29, when ETH ETHs recorded a cumulative $98 million, and the four-highest since they first went live on July 23, data from SoSoValue shows.

Nearly all of Monday’s outflows came from Grayscale’s ETHE product. Bitwise’s ETHW recorded just over $1.3 million in inflows. Other products showed no inflow or outflow activity.

The outflow came despite a broader crypto market rally fueled by last week’s Federal Reserve interest-rate cuts, which helped lift ether prices by 11% over the past week. The disconnect between ETH’s price momentum and ETF flows suggests that investors remain uncertain about the asset’s long-term growth prospects.

A closely watched ratio tracking the relative price strength of ether and bitcoin (BTC) has dropped to its lowest level since April 2021, as CoinDesk previously reported, a sign the broader market favors bitcoin’s perceived stability over ether’s riskier, high-yield potential.

According to Peter Chung, head of research at Presto Labs, the Ethereum blockchain’s “world computer” narrative does not resonate as easily with traditional finance (TradFi) investors as bitcoin’s “digital gold” meme.

“TradFi investors may not respond as enthusiastically to ETH’s investment thesis than to BTC’s. Gold’s investment thesis as an inflation hedge is well-known, and therefore, it is not a leap for TradFi investors to wrap their heads around the idea of ‘digital gold,” Chung said in a message to CoinDesk, referring to an August report by the firm on the topic. “On the other hand, ETH’s ‘world computer’ narrative is much more difficult for non-technicals to grasp.

“Even if they manage to come around, their conviction level would need to be high enough to justify adding a second digital asset exposure after a BTC ETF. This could be challenging because, for those who have already allocated to a BTC ETF in their portfolio, adding another digital asset exposure provides substantially less incremental diversification benefit than the first exposure,” he said.

Bitcoin set fresh lifetime highs in March in U.S. dollars (before tumbling 20%), while ether is yet to break its highs from 2021 and is still about only half that level. Year-to-date, bitcoin has returned over 50% , while ether has gained just under 15%.

Augustine Fan, head of insights at SOFA.org, noted that while ETH has gained on the back of the Fed’s dovish turn, the heavy ETF outflows indicate a fragile sentiment.

“Will a continued price rally rescue ETH ETF inflows from their current doldrums? The answer likely depends on whether we see another blow-off top in equity markets before November,” Fan said. “Ethereum has gained 11% over the past week on no new developments. However, the latest heavy outflow from Ether ETFs indicates uncertain sentiment among investors on its future growth momentum.”

Nick Ruck, an independent market analyst, pointed out that the recent outflows could be linked to broader pessimism about ether’s growth narrative.

“The surge in ETH ETF outflows may stem from investors allocating capital elsewhere due to the ongoing pessimistic outlook for ETH, and the current increase in the price of ETH is a good opportunity to exit the market,” Ruck said in a Tuesday message to CoinDesk. “Ethereum has been criticized recently for failing to push any narratives that could help attract more inflows. However, the new Pectra upgrade set to launch in Feb 2025 aims to enable users to pay gas fees with altcoins, among other benefits.”

“Institutional investors may feel there are better opportunities elsewhere for the time being,” Ruck added.

CORRECTION (Sept. 24, 07:55 UTC): Corrects month of bitcoin record high in sixth paragraph before the end.