Ethereum ETF investors face 43% losses – Will outflows accelerate?

ambcryptoPublished on 2026-02-11Last updated on 2026-02-11

Abstract

U.S. spot Ethereum ETF investors are facing significant losses, with an average cost basis of $3,520 and current prices around $1.95K, leaving them approximately 43% underwater. Despite the sharp decline, investors have shown resilience, reminiscent of their behavior during the 60% drop in early 2025, when outflows were limited. However, current net inflows have decreased from $15 billion to below $12 billion, with about $4 billion in outflows so far. Analysts warn that if the bear market follows historical patterns—particularly the 2022 trend—ETH could bottom between $1,000–$1,200 by late March 2026. Short-term caution prevails ahead of key U.S. macroeconomic data, though a recent $57 million inflow after three days of outflows offers some stability.

U.S. spot Ethereum ETF investors are showing resilience similar to their BTC counterparts, but they are reportedly under elevated market distress.

Amid the extended crypto rout, Bloomberg ETF analyst James Seyffart noted that ETH ETF buyers were down +40% from their cost basis of $3,520.

“Ethereum ETF holders are sitting in a worse position than their Bitcoin ETF brethren. It’s a painful proposition.”

Can ETH ETF investors withstand the pressure?

However, Seyffart said that the investors have experienced similar market distress before in early 2025.

During the Trump tariff wars in Q1 2025, the ETH price dropped 60%, nearly similar to the recent drawdown to $1.8K.

Interestingly, ETH ETF holders hardly flinched at that time, recording only about $1 billion in outflows during the bearish sentiment in early 2025.

But will such resilience be replicated in 2026’s drawdown? According to Seyffar, ETH investors have seen overwhelming selling pressure but have stayed put.

“Still, the vast majority of buyers have stayed put. The net inflows into the ETH ETFs have gone from about $15 billion down below $12 billion.”

He added,

“This is a much worse selloff than the Bitcoin ETFs on a relative basis, but still fairly decent diamond hands in the grand scheme (for now).”

BTC ETFs saw relatively little outflow over the same period.

However, the $4 billion in ETH ETF outflows may just be the beginning if the broader bear market plays out as past patterns suggest.

In the near term, Options traders were heavily hedging against downside risk to $1.6K and $1.9K, as shown by the top volumes (red) over the past 24 hours.

This underscored short-term caution ahead of U.S. macro data on the 13th of February.

Assessing potential bottom

But the Singapore-based crypto trading desk noted that ETH could form a base ahead of Friday’s inflation print, which could set the tone for risk appetite and expectations of Fed rate cuts.

In a market update, the firm added,

“Spot $ETH ETFs flipped back to $57m of inflows after three days of outflows, alongside continued accumulation from Tom Lee’s BitMine, which is helping to steady the narrative around Ethereum after a bruising week.”

At press time, ETH traded at $1.95K and could slip lower if the 2026 bear market follows the 2022 pattern.

If the close correlation with the 2022 trend holds, ETH may form a potential bottom in the $1000-$1200 range by the end of March 2026.

Final Thoughts

  • ETH ETF holders were 43% underwater after the price slipped to $1.95K at the time of writing.
  • Although the investors withstood similar market distress in early 2025, a further drawdown could strain them.

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Related Questions

QWhat is the current average cost basis and percentage loss for U.S. spot Ethereum ETF investors mentioned in the article?

AThe average cost basis for U.S. spot Ethereum ETF investors is $3,520, and they are facing losses of approximately 43% with the price at $1.95K.

QAccording to Bloomberg analyst James Seyffart, how did ETH ETF investors behave during the market distress of early 2025?

ADuring the market distress in early 2025, ETH ETF investors showed resilience and 'hardly flinched,' recording only about $1 billion in outflows despite a 60% price drop.

QWhat is the potential downside risk level that Options traders were heavily hedging against, as indicated by the top volumes?

AOptions traders were heavily hedging against downside risk to the $1.6K and $1.9K price levels for Ethereum.

QWhat event on February 13th is cited as a reason for short-term caution in the market?

AShort-term caution was underscored ahead of the U.S. macro data release on the 13th of February.

QBased on the article's comparison to the 2022 trend, where could ETH potentially find a bottom by the end of March 2026?

AIf the close correlation with the 2022 trend holds, ETH may form a potential bottom in the $1000-$1200 range by the end of March 2026.

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