Assets under management (AUM) across spot Ethereum ETFs have declined sharply over the past four months, underscoring sustained institutional caution toward crypto-linked investment products amid broader market uncertainty.According to the latest data released by Artemis on X, Ethereum ETF AUM has fallen by approximately 65% from its peak. At its high point, spot Ethereum ETFs collectively managed around $30.6 billion, a figure that has since dropped to roughly $10.7 billion, wiping out nearly two-thirds of total assets in a relatively short period.Ethereum ETFs See Deeper Drawdown Than BitcoinThe contraction in Ethereum ETF assets has outpaced losses seen in Bitcoin-linked products. Data shows that Bitcoin ETF AUM has declined by about 49% from peak levels, a significant pullback but notably less severe than Ethereum’s drawdown.While both asset classes are facing capital pressure, the steeper decline in Ethereum ETFs suggests greater sensitivity to price volatility and investor risk appetite, particularly as Ether has underperformed Bitcoin during the latest market correction.Price Declines and Net Outflows Drive AUM ErosionMarket analysis indicates that the sharp reduction in ETF assets is being driven by a combination of falling token prices and persistent net capital outflows. As crypto prices corrected from prior highs, institutional investors appear to have accelerated de-risking strategies, reducing exposure through ETF redemptions rather than adding on weakness.This trend reflects a broader defensive posture among institutional funds, as macroeconomic uncertainty, shifting interest rate expectations, and geopolitical risks continue to weigh on risk assets.Institutional Sentiment Remains CautiousThe magnitude of the AUM decline highlights how quickly institutional sentiment can shift in the crypto ETF market. Despite the long-term narrative around digital asset adoption, current conditions suggest that capital preservation has taken priority over accumulation, particularly for Ethereum-related products.With both Ethereum and Bitcoin ETFs still experiencing ongoing outflows, the data points to a market environment where institutional participation remains selective and highly sensitive to macro signals, rather than driven by crypto-specific catalysts alone.Unless price stability returns alongside renewed inflows, ETF AUM across major crypto assets may continue to face pressure in the near term.