If you've been trading and in crypto for a while now you most likely have heard buy the rumor, sell the news. Most people get really hyped up speculating that something might happen. For example the most recent would be that Ethereum was going to be approved for Spot $ETH ETFs and that sent Ethereum soaring once again.

But now that the Ethereum ETF is here what's happened? At the time of writing this a near 8% drop in the value of Ethereum which feels like it's pulling other tokens down with it. Ethereum is greatly connected to every other token I would say more so now then Bitcoin used to be.

With Ethereum falling like a brick today I thought we should dive into it a bit more and see what's really going on, how it might impact Ethereum holders and stakers and what might be coming next.

• This article is for entertainment purposes only and is not financial advice. Do your own research before investing and understand the risks.

ETFs

With the launch of Ethereum Spot ETFs it now opens up 401ks and other assets to buy and sell Ethereum with them while otherwise that money would have been locked up.

When the Bitcoin ETF was launched we saw the same thing. A drastic decline in price that really has not gotten us back or above the $72,000 we saw just on the speculative news and it feels like Ethereum is going to be no different.

When news breaks we often see outflows from exchanges as people sell the news and want to move the assets out of rather untrusty exchanges that have burned a lot of people in the past and perhaps cycle that into these new ETFs as they would be considered more "trustworthy" and overall easier to manage.

Ethereum has also gone through some radical changes as of late of which a lot of people don't really use Ethereum anymore instead they use layer two tokens and the user base has instead gone to those.

It's pretty clear that people got tired of paying high fees and the user base has been on the decline. But those layer two tokens do in fact still provide value to the overall Ethereum price and value.

This decline has also seen a decrease in terms of the burn. What was once a crazy burn that was decreasing the amount of Ethereum has now changed into a positive where inflation is back. While still low at roughly a half a percent it's still a increase that's happening on the 120,234,912 Ethereum currently in circulation and it's most likely only going to increase as more layer twos launch and use up less of the supply. In just the last 7 days this change has added nearly 14,000 Ethereum to the supply.

Now that doesn't always have to be true. For example if there was a spike in usage we would see fees chomp away again at the Etherum inflation and also this supply does change.

What I really found wild is that of those millions of Ethereum 77 million are still held in accounts and are not tied up. Only 33.4 million are tied up into nodes and 9.2 million are tied up in contracts.

That puts a lot of other things in perspective I think besides simply a sell the news event there are now other things pressing the price down when you start to dive into it deeper.

Posted Using InLeo Alpha