Tech
$3 billion worth of Ether removed from centralized cryptocurrency exchanges since May ETF approval
Since the approval of Ether spot exchange-traded funds (ETFs) in the United States on May 23, centralized cryptocurrency exchanges have seen massive outflows of ETH. Between May 23 and June 2, approximately 797,000 Ether, worth $3.02 billion, moved from centralized exchanges.
This significant movement, reported by CryptoQuant, suggests a potential supply squeeze as more investors opt to self-custody their Ether.
Effects of Ether ETF Approvals
Typically, a decline in the amount of coins held on exchanges means that fewer are available to trade. This trend indicates that investors are moving their Ether into personal wallets, likely for long-term holding or other uses that don’t involve immediate selling.
They probably believe that transferring their holdings will be more profitable than keeping them on the exchange for immediate trading. Such behavior is often seen as a bullish signal, as they indirectly show their confidence in the future value of the token.
In particular, Glassnode data, analyzed by Leon Waidmann of BTC-ECHO, reveals an interesting fact. It Shows that only 10.6% of Ether’s circulating supply is held on exchanges, marking the lowest point in recent years. This sharp decline highlights a significant shift in how investors manage their ETH assets.
Eric Balchunas, ETF analyst at Bloomberg, She said there is a strong possibility that Ether ETFs could launch by the end of June. The introduction of these ETFs is expected to increase demand for Ether, similar to the surge seen with Bitcoin following the launch of Spot Bitcoin ETF in January.
This increase in demand could push Ether prices higher, potentially surpassing the all-time high of $4,870 recorded in November 2021.
Meanwhile, Michael Nadeau, a crypto analyst at DeFi Report, noticed that Ether could see even greater benefits from demand pressures than Bitcoin. Unlike Bitcoin miners, who often need to sell Bitcoin to cover mining costs, Ethereum validators don’t face the same financial pressures.
Possible Impact of Grayscale’s Ethereum Trust on ETH Price
Additionally, Grayscale’s Ethereum Trust (ETHE), which manages approximately $11 billion in funds, could soon significantly influence the price of Ether. This concern arises from historical impact of Grayscale’s Bitcoin Trust (GBTC).
After approval, GBTC experienced massive outflows of $6.5 billion in the first month. Considering this event, ETHE could experience significant market fluctuations and price changes if the same fate befalls it.
Meanwhile, the potential impact of Grayscale’s Ethereum Trust on the price of Ether remains a critical point of concern for investors. The uncertainty as to whether ETHE will follow GBTC requires more caution and vigilance on their part.
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