Ethereum

$3 Billion in ETH Withdrawn After One-Time Ethereum ETF Approval

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Significant movement has occurred in the crypto market since the U.S. Securities and Exchange Commission’s (SEC) preliminary approval for Ethereum spot exchange-traded funds (ETFs).

A recent analysis by CryptoQuant highlights that unidentified entities withdrew over 800,000 Ethereum (ETH) from crypto exchanges, worth approximately $3 billion.

Rising Ethereum Withdrawals Signals Investor Optimism

Burak Kesmeci, an analyst at CryptoQuant, assumes that these transactions come from either individual crypto whales or institutional investors. He hypothesized that each whale anticipates an increase in the price of ETH following the approval of a spot ETF. Meanwhile, institutional investors are likely preparing for the launch of these ETFs.

“These institutions may want to meet the demand of their investors with the launch of the Ethereum spot ETF,” Kesmeci wrote.

Learn more: Ethereum ETF explained: what it is and how it works

Total Ethereum exchange net flow. Source: CryptoQuant

Despite the anonymity surrounding these transactions, both are attracted by the market behavior observed after the approval of spot Bitcoin ETFs.

The migration of such a large volume of ETH from exchanges generally indicates a preference for holding assets on self-custody platforms. This situation leads to stricter supply conditions on crypto exchanges.

Therefore, Kesmeci predicts that the current withdrawals will positively influence the price of Ethereum in the medium term. The reduction in ETH held on exchanges often hints at a future supply squeeze, likely to drive prices higher as availability decreases.

Indeed, the preliminary approval of Ethereum spot ETFs have injected renewed optimism in the market and the broader crypto industry. BeInCrypto previously reported that some protocols in the Ethereum ecosystem, like Aave and Uniswap, saw an increase in total value locked (TVL) during the period.

Bloomberg ETF analysts James Seyffart and Eric Balchunas spoke. They predict that Ethereum ETFs could capture 10% to 20% of the flow seen by their Bitcoin counterparts. According to SoSo Value dataSpot Bitcoin ETFs have generated a total net inflow of $13.6 billion since their inception.

Learn more: How to invest in Ethereum ETFs?

Seyffart and Balchunas wait final approval of Ethereum ETFs by Julywhich suggests that the market could see even bigger moves in the coming months.

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