Ether ETF Investors Face Steep Losses Amid Market Slump

Investors in BlackRock and Fidelity’s spot Ether exchange-traded funds are facing sharp unrealized losses, according to a new analysis by blockchain data firm Glassnode. The report states that the average holder of these ETFs is currently sitting on a 21% paper loss, reflecting the gap between Ether’s current trading value and the purchase price of the funds. Ether, which is trading at $2,601, is well below the cost basis for both ETFs — with BlackRock’s average at $3,300 and Fidelity’s even higher at $3,500. The asset’s decline over recent months has significantly impacted investor sentiment and ETF performance. Tariffs Triggered the Downturn The last time Ether traded above $3,000 was in early February. The downtrend began shortly after then-President Donald Trump issued executive orders imposing tariffs on imports from China, Canada, and Mexico. The crypto market reacted sharply, and Ether’s price plummeted to a yearly low of $1,472 on April 9 — the same day those tariffs took effect. Glassnode highlighted that ETF outflows accelerated when the spot price of Ether dipped below the average cost basis in August 2024, and again in January and March 2025. This reflected growing investor concerns and a broader crypto market correction. Signs of Recovery and Renewed Interest Despite these losses, Ether has rebounded by over 44% in the past month. From May 16 onward, spot Ether ETFs have recorded nine consecutive days of inflows totaling $435.6 million. The inflows are partly attributed to easing concerns around Trump’s tariff policies, especially after a US federal court blocked most of them on May 28. Market watchers believe this court ruling could fuel a broader crypto recovery, with Ether potentially leading the charge. Spot ETFs recorded their last net outflow on May 15, marking a shift in investor behavior. Mixed Reception Since Launch Since their launch in July 2024, US-based spot Ether ETFs have accumulated $2.94 billion in inflows. Ether was trading at roughly $3,536 at the time, making current prices a major drawdown for early participants. Glassnode noted that ETF volume was modest at first, making up just 1.5% of spot market trades. Although that share rose to 2.5% during November 2024 — coinciding with Trump’s re-election and a market-wide rally that pushed Ether to $4,007 — the figure has since fallen back to earlier levels. Lack of Staking a Key Limitation Speaking at the Digital Asset Summit in March, BlackRock’s head of digital assets, Robbie Mitchnick, acknowledged one weakness in their offering. He said the spot Ether ETF is “less perfect” without the inclusion of staking, a feature many crypto investors now consider standard. The sentiment underscores the challenges facing Ether ETFs, even as the broader market shows signs of stabilization. Investors remain hopeful that recent momentum can be sustained, but for now, many remain underwater.

Source: CryptoIntelligence