Author: Nancy, PANews

Recently, Ethereum's price has consistently lagged behind mainstream assets, failing to break through resistance levels multiple times. Meanwhile, with spot demand for Ethereum falling to its lowest level this year, market concerns about further downside are growing, and institutional activity is gradually becoming a focus.

Spot demand hits a new low for the year, Ethereum enters a headwind cycle.

Since July of last year, the ETH/BTC exchange rate has been weakening. Especially during the recent recovery, Ethereum's rebound has been significantly weaker than Bitcoin's.

From the demand side, according to crypto analyst Crypto Rover, ETH spot demand has fallen to its lowest level this year, even below the interim low of February 6th. Historical experience shows that weakening spot demand often indicates that prices may fall further.

In terms of returns, CoinGecko data shows that Bitcoin's quarterly returns in Q1 and Q2 were -22.2% and 12.96% respectively, while Ethereum's returns were -29.26% and 0.85% during the same period.

The funding situation also confirms this trend. In terms of spot ETFs, Bitcoin ETFs have seen net inflows for several consecutive months since March this year; in contrast, Ethereum ETFs only recorded net inflows in April, and for the rest of the time, they have experienced outflows or remained weak.

The Ethereum Foundation and Vitalik's sell-off also impacted market confidence. Although the proceeds were primarily used for operating expenses, protocol development, and ecosystem funding, they still put pressure on secondary market sentiment. For example, according to AiYi data monitoring, the Ethereum Foundation has sold a total of 30,000 ETH since March 15th, with a total value exceeding $68.92 million. Of this, approximately 25,000 ETH were sold to BitMine via OTC to minimize the direct impact on the open market.

Regarding the factors behind Ethereum's poor price performance, BIT (formerly Matrixport) analysis points out that Ethereum's recent price performance has become increasingly dominated by ETH fund flows. Over the past year, the 30-day average daily net inflow into the ETH ETF has been highly synchronized with Ethereum's price movement, indicating a significant increase in Ethereum's price sensitivity to institutional funds. One of Ethereum's core narratives is its net staking yield of approximately 2.5%. However, with inflation accelerating again and the US 10-year Treasury yield rising above 4.6%, Ethereum's staking yield advantage compared to risk-free assets such as US Treasuries is weakening. Entering May, the Ethereum ETF turned to net outflows again, consistent with the above logic. If this trend continues, Ethereum will likely remain in a consolidation phase.

BitMine Chairman Tom Lee stated that Ethereum is currently facing selling pressure, with the biggest headwind coming from rising oil prices, and the negative correlation between ETH and oil prices is at an all-time high. Ethereum's price fell during the past six weeks of rising oil prices, and it is expected to rebound if oil prices fall. However, he emphasized that this is a short-term tactical fluctuation, and Ethereum's bigger drivers come from tokenization and AI agents; these structural factors are in place, and he expects Ethereum's price to strengthen in 2026.

JPMorgan Chase points out that although the crypto market has generally recovered after the Iranian conflict, ETH and other altcoins continue to underperform BTC, a trend that began in 2023 and is unlikely to change in the short term unless there are significant improvements in network activity, decentralized finance, and real-world applications. Furthermore, Ethereum's upgrades over the past few years have not significantly improved on-chain activity; instead, reducing Layer 2 costs has weakened mainnet transaction fees and burn mechanisms. The bank also notes that spot ETF flows and CME futures positions both indicate that institutions are repairing their risk exposure to BTC more strongly than to ETH.

Some people are buying more shares against the trend, while others are making an emergency retreat.

Ethereum prices continue to be under pressure, and different institutions are employing different strategies.

Some funds chose to increase their positions against the trend or buy on the dip, and enhanced returns and hedged against volatility by introducing pledged products; at the same time, other institutions adopted a more cautious strategy, including actively reducing their exposure or even completely liquidating their positions.

It's important to note that reducing holdings is not entirely equivalent to being bearish. In the current macroeconomic and market environment, it's more about risk control, position balancing, and liquidity management. Furthermore, some cases of complete liquidation don't necessarily stem from a negative outlook on Ethereum; for example, Harvard University's liquidation was largely due to operational pressures and funding needs of its endowment fund.

In addition, the 13F filing is a lagging quarterly snapshot, reflecting only the holdings at the end of the previous quarter, and not the real-time trading behavior of institutions.

Institutions that increase positions against the trend/buy the dip

Jane Street

In the first quarter of 2026, Jane Street increased its allocation to ETH.

According to the 13F filing, as of Q1, Jane Street held approximately 11.09 million ETHA shares, an increase of approximately 87% quarter-over-quarter, with a holding value of approximately $176 million. The number of ETHA call options decreased by approximately 13%, with a value of approximately $144 million, while the number of put options increased slightly by approximately 8%, with a value of approximately $129 million.

In addition, the firm reduced its put option holdings in ProShares EETH by approximately 16%, with a holding value of $49.99 million; at the same time, it significantly increased its holdings in Fidelity FETH, with the number of holdings surging by 1926% compared to the previous quarter, and the value rising to approximately $43.64 million.

Wells Fargo

The 13F filing shows that Wells Fargo increased its exposure to ETH in the first quarter of 2026.

Specifically, it holds $17.57 million worth of ETHA, representing a month-over-month increase of approximately 65%; at the same time, its holdings of Bitwise's ETHW also increased, with a month-over-month increase of approximately 38%, valued at approximately $3.86 million.

BitMine

As one of the most aggressive bulls, BitMine continues to increase its holdings of Ethereum.

According to Blockworks data, BitMine has accumulated over 967,000 ETH since the beginning of 2026. Although the pace of purchases has slowed compared to the previous two quarters, it still shows an overall monthly increasing trend. Currently, BitMine holds over 5.2 million ETH, worth over $11 billion.

Faced with huge unrealized losses, BitMine has reportedly increased its returns through staking. Meanwhile, Tom Lee recently disclosed that BitMine is evaluating whether to slow down its buying pace and instead allocate capital to its $4 billion share buyback program.

BIT (Matrixport)

According to the latest data monitoring from Lookonchain, whales associated with BIT continued to increase their long positions in ETH during the market downturn. They currently hold 120,000 ETH ($254 million), with a paper loss exceeding $17.5 million.

ShapeShift

During the rapid market decline, according to Onchain Lens monitoring, a mysterious whale from ShapeShift invested $5.88 million to buy 2,656 ETH. This whale now holds 129,667 ETH, worth over $274 million.

It should be noted that this whale was previously believed to be associated with ShapeShift founder Erik Voorhees, but the latter has denied this.

Reduce positions or shift to a defensive strategy

Goldman Sachs

Looking at the changes in ETH holdings in the first quarter of 2026, Goldman Sachs shifted to a defensive allocation strategy, significantly reducing its spot exposure, increasing its bearish hedging, and introducing pledged assets.

According to its 13F filing, Goldman Sachs significantly reduced its holdings of ETHA this quarter, with the number of shares decreasing by approximately 74% quarter-over-quarter and the value of the holdings falling to approximately $114 million. At the same time, its put option holdings of ETHA increased by approximately 69%, reaching a value of $60.31 million, while its call option holdings decreased by approximately 67%, falling to a value of approximately $3.44 million.

In addition, Goldman Sachs opened a new position in BlackRock's pledged ETF ETHB this quarter, with a corresponding holding value of approximately $66.89 million, and liquidated its Fidelity FETH holdings worth $390 million.

Susquehanna International Group

As of the first quarter of 2026, hedge fund Susquehanna International Group shifted its Ethereum allocation from directly holding spot ETFs to managing risk through options, while also increasing its allocation to collateralized products with yield attributes.

Specifically, SIG's holdings of ETHA spot shares decreased to approximately 3.13 million shares, a significant reduction of about 75% from the previous quarter, corresponding to a decrease in holding value of about 82% to approximately $49.62 million. Simultaneously, its ETHA call option holdings increased by about 41% to 14.39 million contracts (worth approximately $228 million), while its put option holdings also increased by about 23% to 11.12 million contracts (worth approximately $176 million). Furthermore, SIG significantly increased its holdings of Grayscale's pledged ETF product ETHE, with holdings surging by about 795% quarter-over-quarter to approximately 5.31 million contracts, worth approximately $106 million.

Citadel Advisors

Citadel Advisors, a subsidiary of hedge fund Citadel, reduced its overall exposure to Ethereum-related assets in the first quarter of 2026.

The 13F filing shows that the amount of ETHA it holds decreased by about 40% quarter-over-quarter, with the holding value falling to about $40.97 million. At the same time, the value of ETHA call options was about $109 million, a decrease of about 21% quarter-over-quarter, while put options were about $72.51 million, a decrease of about 44%.

Millennium Management

The 13F filing shows that hedge fund Millennium Management moderately reduced its holdings in Ethereum spot ETFs in Q1 2026, but still maintained core exposure overall.

This quarter, the fund held approximately 16.47 million shares of BlackRock ETHA, worth approximately $260 million, a decrease of approximately 34% from the previous quarter; meanwhile, it held approximately $77.15 million worth of Fidelity FETH, a decrease of approximately 4% from the previous quarter.

Clearance Sale

Harvard University

According to 13F filings, Harvard University liquidated its entire ETHA holdings, valued at approximately $86.82 million, by Q1 2026. This portfolio management by Harvard is primarily driven by factors such as an operating deficit in its endowment fund, disruptions to federal funding, and political pressure. Crypto ETFs, being highly liquid assets, naturally became a priority target for divestment.