Crypto exchanges see $3B Ethereum exit since ETF approvals
|Over $3 billion worth of Ether (ETH $3,814) has been removed from centralized crypto exchanges since the May 23 approval of spot Ether exchange-traded funds (ETFs) in the United States — signaling a potential upcoming supply squeeze.
The amount of Ether on exchanges fell by around 797,000 between May 23 and June 2 — equivalent to $3.02 billion, according to CryptoQuant data.
Lower exchange reserves imply fewer coins are available for sale as investors move their own coins to self-custody for purposes other than immediate selling.
Source: Leon Waidmann
Glassnode data shared by BTC-ECHO analyst Leon Waidmann shows the percentage of circulating Ether supply held on exchanges is also at its lowest level in years at just 10.6%.
Ethereum ETFs carve path to ATH
Last week, Bloomberg ETF analyst Eric Balchunas tipped Ether ETFs as having a “legit possibility” of launching by late June.
Some analysts believe Ether could break its November 2021 all-time high of $4,870 once spot Ether ETFs start trading due to increased demand pressure — similar to Bitcoin (BTC $68,817) after the trading launch of spot Bitcoin ETFs in January.
Ether could benefit even further from demand pressures than Bitcoin, as it does not have the same level of “structural sell pressure,” DeFi report crypto analyst Michael Nadeau said in a May 28 report.
For example, Bitcoin miners are occasionally forced to sell BTC to cover the costs of mining, while Ethereum validators do not incur the same operating expenses as Bitcoin miners do.
However, there are also concerns that Grayscale’s Ethereum Trust (ETHE), which manages $11 billion in funds, could influence Ether’s price action if it follows the Grayscale Bitcoin Trust (GBTC) — which saw $6.5 billion in outflows in just the first month after approval.
Ether is currently trading at $3,781, down 0.82% over the past 24 hours and down around 23% from its all-time high, according to CoinMarketCap.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.