Over $3B Ether Withdrawn From Exchanges; Potential Launch and Impact of ETH ETFs Examined
Summary:
Following the approval of spot Ether exchange-traded funds in the US, over $3 billion Ether has been removed from centralized exchanges, indicating a potential supply squeeze. Bloomberg ETF analyst predicts Ether ETFs could launch by late June, and there are expectations of Ether surpassing its highest value once this takes effect. Meanwhile, concerns over Grayscale's Ethereum Trust potentially affecting Ether's price movement are being expressed. Ether is presently trading at 23% less than its highest value.
In the period following the approval of spot Ether exchange-traded funds (ETFs) in the USA on May 23, over $3 billion Ether (ETH), the popular cryptocurrency, was noted to have been withdrawn from centralized crypto exchanges. This indicates a potential forthcoming supply bottleneck. As per data by CryptoQuant, between May 23 and June 2, approximately 797,000 Ether was detracted from exchanges equaling $3.02 billion. Reduced exchange inflows insinuate lesser coins availability for sell-off with investors increasingly choosing to retain their coins for uses beyond immediate selling. BTC-ECHO analyst, Leon Waidmann, shared information by Glassnode showing the least amount of Ether held on exchanges in recent years, standing at just 10.6%.
Bloomberg ETF analyst, Eric Balchunas, last week predicted Ether ETFs could potentially launch by late June which might lead Ether to surpass its November 2021 high of $4,870 once trading commences. This is expected to correspond to amplified pressure on demand, resonating with the trend seen with Bitcoin (BTC) after the commencement of spot Bitcoin ETFs trading in January.
Crypto analyst, Michael Nadeau, in his May 28 report hinted that Ether could saliently benefit from these demand pressures more than Bitcoin due to Ether's lesser level of "structural sell pressure". As compared to Bitcoin miners who at times must sell BTC to offset costs of mining, Ethereum validators are not burdened with similar operational costs. Despite this, there are concerns regarding Grayscale's Ethereum Trust (ETHE) that manages $11 billion in funds, potentially impacting Ether's price movement if it imitates Grayscale Bitcoin Trust (GBTC) that experienced $6.5 billion in withdrawals within the month post-approval. Ether is presently trading at $3,781; 0.82% lower over the past day, and down roughly 23% from its peak as reported by CoinMarketCap.
Published At
6/3/2024 3:35:07 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.