Introduction
Ethereum ETF investors are sitting on significantly steeper unrealized losses than their Bitcoin counterparts, with current prices far below average entry points. Despite a severe drawdown exceeding 60%, data suggests most holders are demonstrating resilience, while a major institutional disclosure from Goldman Sachs reveals a surprisingly large and bullish bet on Ethereum’s long-term prospects.
Key Points
- Ethereum ETF holders' average cost basis is approximately $3,500, leaving them down over 40% with ETH near $2,000.
- Goldman Sachs holds roughly equal allocations to spot Bitcoin and Ethereum ETFs (~$1 billion each), defying typical market-cap weighting conventions.
- Despite multi-week outflows totaling hundreds of millions, net asset outflows have recently slowed, suggesting selling pressure may be easing.
A Painful Entry Point for Ethereum ETF Investors
According to Bloomberg Intelligence analyst James Seyffart, investors in spot Ethereum ETFs are in a substantially worse position than those in Bitcoin funds. Seyffart noted on X that the current ETH price of around $2,000 is “way below” the average cost basis for ETF holders, which he estimates at approximately $3,500. This represents a drawdown of over 40% from the average purchase price, a situation Seyffart described as “a painful proposition.”
The analyst contextualized the severity by pointing out that the most recent trough pushed the drawdown “beyond 60%,” roughly matching the percentage decline ETH experienced at its low in April 2025. While severe, Seyffart framed this as not unprecedented for Ethereum’s investor base. Despite the steep paper losses, the investor response has been notably stoic. “Still, the vast majority of buyers have stayed put,” Seyffart wrote, attributing this to “fairly decent diamond hands in the grand scheme.”
Outflow Trends Show Pressure, But Signs of Stabilization
The resilience of holders is being tested by persistent outflows. Seyffart pointed out that net inflows across the ETH ETF complex have deteriorated from roughly $15 billion to below $12 billion. He emphasized that this decline is “materially larger” than that seen in Bitcoin ETFs on a relative basis. Data from SoSoValue provides a granular look at this trend, showing US spot ether ETFs experienced a week of net redemptions totaling roughly $166 million, extending a multi-week outflow streak.
On a monthly basis, SoSoValue figures peg last month’s net flow at about $350 million in outflows. Cumulatively, total net assets stood at $11.76 billion as of February 10. However, fresh flow data suggests the bleeding may be slowing, though not yet reversing decisively. SoSoValue reported that the funds took in about $13.82 million in net inflows on February 10, a potential early sign that the intense selling pressure is beginning to ease.
Goldman Sachs' Bullish Institutional Bet on Ethereum
Against this backdrop of retail investor pain, Goldman Sachs delivered a powerful counter-signal through its latest 13F regulatory disclosure. The filing revealed about $2.36 billion in crypto-related positions within its broader portfolio. Crucially, the bank disclosed roughly $1.06 billion tied to spot Bitcoin ETFs and approximately $1.0 billion to spot Ethereum ETFs. This near-parity in allocation between BTC and ETH caught the market’s attention.
MoonRock Capital founder Simon Dedic highlighted the significance of this sizing. “For a conservative investment bank that typically sticks to standard portfolio structures like market cap weighting, this speaks volumes on how they’re significantly more bullish on Ethereum than Bitcoin,” Dedic noted. He pointed out that a standard market-cap-weighted approach would typically see a Bitcoin allocation 4–6x larger than Ethereum’s. Dedic interpreted this as evidence of an “institutional supercycle” where “ETH is clearly the institutional darling.”
The reactions extended beyond Ethereum. Goldman’s filing also showed smaller exposures of about $153 million in XRP and $108 million in Solana (SOL), indicating a diversified crypto strategy. Binance founder Changpeng “CZ” Zhao framed the institutional move as a strategic gap, suggesting crypto natives who sold recently may have acted prematurely while traditional finance begins buying in earnest. Goldman’s total crypto allocation represents about 0.33% of its broader holdings, a small but meaningful and highly visible foray by a traditional finance titan.
The Divergence Between Short-Term Pain and Long-Term Faith
The current market dynamic presents a clear divergence. On one hand, Ethereum ETF holders, many of whom entered near the peak, are enduring significant short-term paper losses with ETH trading at $1,949 at press time. The outflow data confirms a period of stress and redemption pressure. On the other hand, the strategic, long-term capital allocation from a firm like Goldman Sachs suggests powerful institutional confidence in Ethereum’s fundamental value proposition, independent of its current price cycle.
This creates a complex narrative for ETH. The severe drawdown highlighted by James Seyffart of Bloomberg Intelligence underscores the volatility and risk inherent in the asset. Simultaneously, the nearly equal-weight bet by Goldman Sachs, defying conventional portfolio wisdom, signals a profound vote of confidence in Ethereum’s network and its future role in finance. The market now watches to see if the “diamond hands” of retail holders can weather the storm long enough to converge with the long-term institutional thesis that appears to be building.
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