Summary Ethereum and Bitcoin did not participate in the broad meltdown seen elsewhere in markets. Since they don't require machines to secure ledgers, Proof-of-Stake Digital Assets might theoretically be immune from tariff considerations since they don't physically exist. Concerns remain in Ethereum's spot ETF capital flows. Where despite positive year to date net flows through April 3rd, there is a relative lack of demand compared to BTC ETFs. We can see this specifically through ETHE's share of total spot ETH ETF supply - which still stands at 38% and makes ETHE the largest fund. April 4th brings another session of turmoil and panic in global markets. Equities, commodities, and precious metals are all experiencing another day of deep, across-the-board losses. Of all markets, it is cryptocurrencies that are actually holding up well, with Bitcoin ( BTC-USD ) and Ethereum ( ETH-USD ) both green during April 4th trading as of article submission. Frankly, this is a somewhat perplexing development, but I'll get into why I believe there is perhaps a signal in the apparent 'crypto immunity' from global tariff concerns. In this Grayscale Ethereum Trust ETF ( ETHE ) article, we'll get into ETH's correlation with tech stocks, holder data, and recent capital flows. Digital Asset Tariff Immunity? Let's start with the obvious; cryptocurrencies and digital assets don't actually exist. Shocker, I know. But it happens to be true. Thus, in a world with trade-war escalation, assets that are not bound by physics or geographic borders have perhaps understandably shown little regard for tariff concerns since 'Liberation Day.' 5 Day Performance (Seeking Alpha) The chart above shows BTC and ETH against proxies for the Nasdaq and S&P 500 as well as Gold ( XAUUSD:CUR ) and Crude Oil ( CL1:COM ). Through 2pm on April 4th BTC and ETH are holding up while virtually every other major asset or index is down by at least 3%. Digital assets theoretically being immune from jurisdiction risk regarding tariffs is really only one part of this, however. What I still find very perplexing about the action for BTC and ETH is that during stock market panics like the one we're seeing in real time, we often see everything down together as market participants raise liquidity any way they can. For instance, it's not out of the realm of possibility that profitable Gold positions could be sold by speculators who are de-risking while equities fall apart. One would think BTC and ETH would be getting dragged down in sympathy with the rest of the market due to possible margin calls. But that is not happening as the week of March 31st draws to a close. IntoTheBlock It's hard to truly express how bizarre this is because these assets are typically tightly correlated with US equities, particularly tech stocks like the Magnificent Seven. Between mid-March and today, only Tesla ( TSLA ) has seen correlation with ETH dip below 65%. Most of the stocks shown in the chart above had correlations with ETH in excess of 80%. Could it truly be that tariffs don't impact cryptos? I'm actually much less sold on that possibility; especially for Bitcoin, which has a US mining footprint that requires machines produced overseas for hashing. This is not a concern for ETH, since Ethereum is a Proof-of-Stake network. Perhaps more likely? Down nearly 60% since mid-December, ETH has already sold off so bad that it's possible that there is simply nobody left who is willing to sell - even raising liquidity could alleviate problems elsewhere. ETH Holders (IntoTheBlock) At 53% of holders currently 'out of the money,' this level of token holders hanging onto losing positions hasn't been seen in ETH in about 5 years. So what do we do with this information? I've been more cautious about Ethereum in recent months on what I view to be a weakening fundamental story, given the network's lack of fees and scaling through secondary layers that don't require nearly as much ETH for gas payment. Given that, it's hard for me to say 'buy ETH' based on any fundamental improvement in the market. But there are other considerations to keep in mind. Seasonality and Capital Flows ETH Seasonality (TrendSpider) I think we have to take some of the seasonality information with a grain of salt because it flat out did not work in January, February, or March. That said, April and May have historically been the best two months of the year for ETH based on mean change. That figure is 23% for April (2025 is included here) and 31% for May. For me, the bigger thing to pay attention to is whether capital is flowing in or out of ETH-based financial products. Asset (mil) MTD Flows YTD Flows AUM Bitcoin -$826 $1,519 $114,475 Ethereum -$370 $316 $9,565 Multi-asset -$206 -$137 $6,366 Solana $27 $86 $1,194 XRP $15 $168 $957 Source: CoinShares, as of March 28th We know that capital exited ETH products during the last full month of March. However, year to date flow for ETH was still positive at $316 million at the end of the month. ETH ETF Flows (Farside Investors) Even though we've seen a little under $60 million come out of Ethereum ETFs so far through three full days in April, the majority of that outflow is from a $31 million single day decline in ETHE on April 2nd. On that same day, an additional $20.2 million came out of the iShares Ethereum ETF ( ETHA ). The problem ultimately is that ETHE's outflow on the 2nd isn't indicative of Grayscale 'fee flight' continuation: ETH ETF Supply Share (TheBlock) In fact, ETH ETF share of on-chain supply still favors ETHE which commands over a third of the total market at 38.3%. Importantly, ETHE holding firm in supply share for most of 2025 is probably more indicative of a lack of demand for other funds. For instance, it took a little over 4 months for the iShares product to become the largest ETF holder of Bitcoin in the US spot ETF market. We're 8 months into ETH ETFs in the US market, and ETHE still has a 43% supply edge over ETHA. I read this primarily as a lack of investment demand for Ethereum more broadly. Closing Takeaways To answer the question from the headline from the title, I do think ETH is sending a signal. On a day filled with motivated sellers, ETH holders were not among them. Ultimately though, I see more than just one signal in the data. While it's quite encouraging that ETH didn't fall apart with the rest of the market on April 4th, it's perhaps more of an indication that ETH isn't actually as far along with traditional investors as digital asset holders might have hoped. Perhaps the reason ETH isn't getting slammed with the rest of the market is because there just aren't enough people holding it to begin with? Bottom pickers may find the $1,800 per coin level to be an interesting enough area to make a contrarian trade attempt. I'll re-share something I said in March about how I still currently view ETH technicals: I see $2,100 per coin serving as support on weekly closes going back to late 2023. That level was breached on a close the week of March 3rd, failed a back test the week of March 10th, and is currently still under that key level as of article submission on March 20th. I, personally, would not entertain taking a stab at that trade from the long side until we see the coin take back $2,100 on a weekly close. The lack of demand for products like ETHA and similarly lower-priced spot ETFs might remain a headwind of Ethereum bulls should holders keep selling out of ETHE positions. In spite of real problems with ETH's network activity, you could still talk me into holding spot ETH ETFs, but ETHE isn't one of them.
