Ethereum ETFs See Record Inflows as Crypto Winter Thaws

Money’s flooding back into crypto—and Wall Street’s late as usual. Ethereum ETF products just posted their biggest weekly inflows since 2024’s bull run, signaling institutional FOMO as the market shakes off bearish sentiment.

Why now? Two words: price action. ETH’s 30% rebound from May lows has traders chasing momentum, while traditional finance finally wakes up to blockchain’s yield potential beyond Bitcoin maximalism.

Behind the numbers: Grayscale’s ETHE product alone saw $120M net inflows last week—proof that even suits can’t ignore smart contract platforms when gas fees drop below meme-stock brokerage commissions.

The cynical take? Banks will now spend millions rebranding their decade-old custody services as ’Web3 solutions’ while taking 2% management fees on your self-custodied assets.

ETH Price vs. ETF Cost Basis

Currently, Ethereum (ETH) is trading around $2,601, according to CoinMarketCap. However, when BlackRock and Fidelity started their ETFs, the cost basis was much higher:

• BlackRock ETF average cost basis: $3,300

• Fidelity ETF average cost basis: $3,500

This means that Ethereum WOULD need to rise by more than 25% for investors to break even.

What Caused the Drop?

The last time ETH traded above $3,000 was February 2, 2025. After that, the price dropped sharply, in part due to political developments. A major reason was an executive order from former U.S. President Donald Trump, which imposed tariffs on imports from China, Canada, and Mexico.

These tariffs created uncertainty in the financial markets, and the crypto sector was not spared. Ethereum, like other digital assets, saw its price fall. ETH even hit a yearly low of $1,472 on April 9, the same day the tariffs came into effect.

Inflows Continue Despite Losses

Interestingly, even though many investors are facing losses, Ethereum ETFs have seen consistent inflows. Since May 16, they’ve recorded nine straight days of positive inflows, adding up to $435.6 million. This suggests that some investors remain confident in Ethereum’s long-term potential, especially as political tensions ease.

Just recently, on May 28, a U.S. federal court blocked most of Trump’s tariffs, which may help reduce market fears and support a recovery in crypto prices.

Ethereum’s Price Performance

Despite recent troubles, Ethereum has been slowly recovering. Over the past month, ETH has gone up more than 44%, showing signs of strength. Still, it’s far from the price levels needed to recover the full value of ETF investments.

Glassnode highlighted that ETF investors started selling more actively when Ethereum’s spot price fell below their cost basis. This happened in August 2024, January 2025, and again in March 2025.

Limited Impact of ETFs on Price

While ETFs often help boost prices in traditional markets, Glassnode said Ethereum ETFs have had limited influence on ETH’s spot price so far. At their start in July 2024, the ETFs made up only about 1.5% of total ETH trading volume.

There was a brief increase to over 2.5% in November 2024, around the time TRUMP won the U.S. presidential election and Ethereum rallied to $4,007 on December 8. But since then, ETF trading volume has dropped back toward 1.5%, suggesting the funds haven’t had a strong long-term effect.

Staking and ETF Performance

One factor affecting ETF demand might be the lack of staking. At a recent Digital Asset Summit in March, BlackRock’s head of digital assets, Robbie Mitchnick, said their Ethereum ETF was “less perfect” without staking features.

Staking allows Ethereum holders to earn rewards by locking up their ETH to support the network. This can be a big draw for investors, so ETFs that don’t include this feature may be less appealing, especially during market downturns.

Outlook: Will ETH Rebound?

Despite current losses, the long-term outlook for Ethereum remains a topic of debate. With trade tensions easing and the court blocking most of the tariffs, market conditions could improve. Ethereum’s strong monthly performance and steady ETF inflows show that investor confidence hasn’t disappeared.

If ETH continues to rise, it could help reduce investor losses and restore faith in spot ETFs. But for now, many investors are watching closely, waiting for prices to return to earlier highs.