Why Ethereum ETF Investors Are Losing Big — And What It Signals for the Market

Key Insights

• Most Ethereum ETF investors are currently seeing strong unrealized losses and are averaging around 21% since the ETFs launched.

• The reintroduction of U.S. trade tariffs under President Trump was a major external factor in this sell-off.

• Despite these losses, Ethereum ETFs recently saw nine consecutive days of inflows of over $435 million.

• Technical indicators for Ethereum show a short-term bearish outlook, with sellers currently in control and key support levels needing to be held.

• Even with recent inflows, Ethereum ETFs represent a very small portion (1.5%) of the asset’s total spot trading volume.

  When Ethereum spot ETFs launched in the U.S. in July of last year, it was a massive milestone for the crypto industry

Heavyweights like BlackRock and Fidelity led the charge and expectations ran high. Ether (ETH) was trading around $3,536 at the time, and many believed it was the beginning of a bullish chapter for Ethereum.

Less than a year later, those hopes have largely faded

According to Glassnode, the average Ethereum ETF investor is now sitting on an unrealized loss of about 21%

As of writing, ETH is trading near $2,600 and has left many investors “substantially underwater.”

Ethereum ETF Investors Are Deep in the Red

Glassnode’s latest report shows that the average entry point for BlackRock’s Ethereum ETF is roughly $3,300, while Fidelity’s investors entered at an even higher average of $3,500

Considering how Ether is now trading strongly below these levels, the losses are clear.

Investors have lost a lot | Source: Glassnode

The firm pointed out that fund outflows have consistently spiked whenever ETH drops below these average purchase prices

This trend has been especially noticeable during three major dips, including the ones from August 2024, January 2025 and March 2025, when the spot price of Ethereum fell below key support levels

These losses show that while ETFs may have brought institutional legitimacy to Ethereum, they haven’t protected investors from the market itself.

Trade Tariffs Were a Major Turning Point

The major decline in ETH’s price wasn’t just about internal crypto market cycles. One of the main external factors was the return of trade tariffs under U.S. President Donald Trump.

On 2 February, Ethereum was comfortably trading above $3,000. However, just days later, Trump signed an executive order that introduced heavy import tariffs on goods from China, Canada and Mexico

Investors reacted quickly. Markets including crypto, saw a general sell-off as risk appetite vanished.

By 9 April, the day the tariffs officially took effect, ETH had crashed to a yearly low of $1,472

The panic-driven sell-off wiped out months of gains, leaving ETF investors exposed and scrambling for cover.

Recent Inflows into ETFs

Despite the losses, not all signals are negative. This is because between 16 and 25 May, Ethereum ETFs recorded nine straight days of inflows.

These inflows totaled $435.6 million, and analysts generally believe this newfound interest to be from a legal breakthrough with the tariffs on 28 May.

Consistent flows on Ethereum | Source: Farside

In particular, a U.S. federal court blocked major parts of Trump’s tariff policy on May 28, in a development that returned institutional confidence to the markets.

This influx of capital into Ethereum ETFs might be an early sign that sentiment is stabilizing.

It shows that some investors are willing to bet on a recovery now that the trade war narrative is cooling off

However, it’s important to note that even with these inflows, Ethereum ETFs account for just around 1.5% of the asset’s total spot trading volume.

In other words, this is a relatively small slice of the market.

Technical Indicators Show More Downside Ahead

Looking at Ethereum’s technical setup, the outlook is bearish in the short term. After attempting a recovery last week, ETH failed to hold above $2,780 and has now slipped back toward $2,600

Just as the volatility continues, the price fell by more than 3% in just 24 hours.

The bears might be in control | Source: TradingView

According to the Ethereum charts, the cryptocurrency has broken below the 7-day Simple Moving Average, in a show of continued bearish interest in the near-term.

The RSI on the hourly timeframe is also currently below the neutral 50 mark as buying pressure weakens.

In simpler terms, sellers are in control. This means that without strong support, Ethereum may struggle to hold its current levels.

Investors should consider watching the resistance levels around $2,625, $2,650 and $2,720.

Important support/resistance for ETH | Source: TradingView

If these levels are cleared, ETH could rally toward $2,880 or even $2,950

On the flip side, a failure to maintain support above $2,600 opens the door for a drop to, $2,500 and $2,440.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.