In the wake of the United States approving spot Ether exchange-traded funds (ETFs), over $3 billion worth of Ether has exited centralized crypto exchanges in the past one week, according to a report.
On May 23, the Securities and Exchange Commission (SEC) approved spot Ethereum ETFs for the first time. Within a week, a substantial withdrawal, amounting to around 797,000 Ether or $3.02 billion, was made from centralized crypto exchange platforms, which indicates a possible upcoming supply shortage.
Data from CryptoQuant reveals that lower exchange reserves reflect a reduction in coins available for immediate sale. Investors are transferring Ether to self-custody, suggesting they have alternative plans besides selling immediately.
Glassnode’s data, as shared by BTC-ECHO analyst Leon Waidmann, highlights that only 10.6% of the circulating Ether supply remains on exchanges, the lowest level in years.
The approval of Ether ETFs has sparked speculation of Ether reaching a new all-time high (ATH). Bloomberg ETF analyst Eric Balchunas believes Ether ETFs could launch by late June, potentially increasing demand and driving prices upward.
Analysts anticipate Ether exceeding its $4,870 all-time high, mirroring Bitcoin’s post-spot ETF surge. Ether’s potential price advantage stems from lower structural sell pressure compared to Bitcoin, attributed to Ethereum validators’ lower operational costs.
However, concerns linger regarding Grayscale’s Ethereum Trust (ETHE), which manages $11 billion. If ETHE follows the Grayscale Bitcoin Trust (GBTC) pattern, which saw substantial outflows post-approval, it could impact Ether’s price dynamics.
Ether’s current trading price at $3,794 reflects a slight 0.13% dip in the past 24 hours and a 23% drop from its all-time high, as per CoinMarketCap, with market sentiments influenced by reduced Ether reserves on exchanges and the looming launch of Ether ETFs, signaling a potential upcoming bullish trend.
Also Read: Ark Investment Management Withdraws from Ethereum ETF Race
