A new report by blockchain analytics firm Glassnode reveals a sobering truth for investors who jumped into Ethereum-backed exchange-traded funds (ETFs) offered by financial giants BlackRock and Fidelity — many are sitting on steep unrealized losses.
According to Glassnode’s May 29 analysis, the average investor in these spot Ether ETFs is down about 21% from their initial investment. For context, Ether (ETH) is currently trading at approximately $2,601, while the average cost basis for BlackRock’s Ethereum ETF sits at around $3,300. Fidelity’s investors are even deeper in the red, with an average entry price of roughly $3,500.
While Ether is still one of the most dominant altcoins on the market, this sharp decline has left many institutional and retail participants feeling the sting of poor timing — and a shifting macroeconomic landscape hasn’t helped.
Tariffs and Tumult: The Market Context
ETH was trading above the $3,000 mark as recently as early February. But things took a downward turn when former President Donald Trump, returning to political power, signed off on a broad set of tariffs targeting imports from China, Canada, and Mexico. That executive order sent shockwaves through global markets — and the crypto sector wasn’t immune.
Following the tariff announcement, ETH plunged, hitting its yearly low of $1,472 on April 9, coinciding with the tariffs going into effect. Investors who bought into the ETF hype last July are now seeing their holdings shrink, even though crypto markets have shown signs of renewed momentum in recent weeks.
Signs of a Comeback?
Despite the gloomy cost basis outlook for early ETF investors, Ether has actually posted a solid 44.25% gain over the last 30 days, driven in part by optimism around declining trade tensions. Since May 16, spot Ethereum ETFs have enjoyed nine straight days of net inflows, accumulating over $435 million, according to the report.
That uptick may be partially attributed to the U.S. federal court’s decision on May 28 to block most of the Trump-era tariffs — a ruling that has injected some optimism into risk markets, including crypto.
Lukewarm Launch, But Room to Grow
Glassnode pointed out that at launch in July 2024, these Ethereum ETFs only accounted for about 1.5% of total spot trading volume, suggesting a relatively cautious reception compared to Bitcoin ETFs. However, during November 2024, when Trump won the presidential election and the broader crypto market entered a bullish stretch, that number jumped to over 2.5%.
During that rally, Ether surged to a local high of $4,007 on December 8, temporarily giving ETF investors a glimpse of green before the market cooled off again. Since then, trading volume attributable to ETFs has slipped back toward the 1.5% mark, indicating waning momentum and cautious sentiment.
ETF Limitations: No Staking, No Party?
Another key issue highlighted in the Glassnode report is the lack of staking in U.S.-based spot Ethereum ETFs. Robbie Mitchnick, BlackRock’s head of digital assets, acknowledged at the Digital Asset Summit on March 20 that these products are “less perfect” without staking capabilities — a core feature of Ethereum’s proof-of-stake model that offers investors yield on their holdings.
Without the incentive of staking rewards, investors are essentially left hoping for price appreciation — which has so far proved elusive for those who bought in early.
The Bottom Line
While the recent rebound in ETH’s price and the sustained ETF inflows are encouraging, the harsh reality remains: early Ethereum ETF investors are still deep in the red, and recovery is far from guaranteed. Market dynamics continue to be shaped by global politics, shifting regulation, and institutional appetite.
For now, it’s a waiting game — one that will test the patience and conviction of ETF backers hoping Ethereum’s next bull run arrives before their paper losses become permanent.
