ETH ETFs Face $1.1B Net Flow Decline Amidst ETH Price Drop

ETH ETFs have collectively experienced a significant decline of over $1.1 billion in net flows since their inception. This downturn is primarily attributed to the timing of investors' contributions, which occurred when the price of ETH was around $3,300, approximately 27% higher than its current value.

The performance of ETH ETFs is closely tied to the price of ETH, with the share prices of the ETFs largely tracking the cryptocurrency's value. However, the losses incurred by these funds are a result of the ETH value each fund holds compared to the amount spent acquiring it. By calculating the daily US dollar flows for each ETF and dividing them by the daily reference rate, investors can gain a rough estimate of the number of ETH units bought and sold by the ETFs each trading day.

Among the ETFs analyzed, 21Shares' CETH is the only one currently ahead on its net flows. CETH is holding about $18.11 million in ETH, with total cumulative net flows of $16.9 million, resulting in a profit of $1.21 million, or nearly 7.2%. In contrast, Fidelity's FETH is the worst performer, with a loss of $289.2 million, or just under 20%, on its ETH holdings. BlackRock's ETHA has also experienced significant losses, with a decline of 17.6% that translates to a dollar loss of $782.5 million for its shareholders.

The strategy of buying low and selling high has not been consistently applied by ETF customers. The performance of each fund depends on when investors contribute and withdraw their capital. For instance, 21Shares' CETH benefited from inflows that occurred when ETH was trading below $2,500, followed by redemptions when ETH had rallied to briefly clear $4,000. A general increase in the price of ETH would be beneficial for all ETFs, as this would help offset the losses incurred by investors.