ETF Approvals - Crypto Exchanges See $3B ETH Exit

KuCoin

Hey folks.

Since the approval of Sport Ether Exchange Traded Funds (ETFs) in May 2023, in the United States, over $3 billion worth of Ether has been unloaded from centralized crypto exchanges this is something that is signaling a potential upcoming squeeze of the supply.

Between May 23 and June 2, the amount of Ether on exchanges descended by around 797,000 which is equal to $3.02 billion, according to data by CryptoQuant.

Reduced exchange reserves indicate that there are fewer coins for sale when investors transfer their own coins to self-custody for uses other than quick sales.

The percentage of circulating Ether supply kept on exchanges is also at its lowest level in years, at just 10.6%, according to Glassnode data published by BTC-ECHO analyst Leon Waidmann.

Some analysts think, that once sport Ether ETFs start trading, it could break its previous all-time high of $4,870 back in November 2021, because of its increased demand pressure, just like Bitcoin after the trading launch of sport Bitcoin ETFs in January.

Since Ether is not subject to the same "structural sell pressure" as Bitcoin, it may gain even more from demand pressures, according to crypto expert Michael Nadeau of DeFi report, who published research on May 28.

For instance, miners of Bitcoin are sometimes forced to sell Bitcoin to cover the mining costs, while validators of Ethereum do not suffer the same operating costs as miners of Bitcoin do.

But there are also worries that if Grayscale's Ethereum Trust (ETHE), which oversees $11 billion in assets, follows the Grayscale Bitcoin Trust (GBTC), which experienced $6.5 billion in withdrawals in its first month of approval, it may have an impact on Ether's price movement.

Not a financial advice.

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Posted Using InLeo Alpha