How do you think the Elves* or Dwarves "faded" from existence? What should we take that to mean? Do you think this includes the Hobbits (it was never explicitly mentioned that they shared this fate)?
The hobbits are a sub-species of men so they aren't part of the equation. If they were to disappear then likely it's due to completely natural processes.
For the Ents, it would be due to extinction since there are no more Entwives and the Ents can age, grow senile or die.
But the elves being literally immortal, it would be due to their numbers eventually making their way to Aman as they tire from the constant changing and passing of the years, in Middle Earth.