Ethereum
recording withdrawals from exchanges after ETF approval
Latest news, recently completed 3 billion dollars of ETH were removed from centralized exchanges (CEX) after the approval of Ethereum ETFs in the United States. What does that mean? Let’s see all the details below.
Latest News: Approval of Ethereum ETFs in the USA triggers withdrawal of ETH from centralized exchanges
As expected, since the approval of spot Ether exchange-traded funds (ETFs) in the United States on May 23, more than $3 billion worth of Ethereum has been withdrawn from centralized crypto exchanges (CEX).
Indicating a possible imminent contraction of supply. The data of CryptoQuant show that between May 23 and June 2, the amount of Ether held on exchanges decreased by approximately 797,000 ETH, or the equivalent of $3.02 billion.
This decline in reserves indicates that fewer coins are available for immediate sale, as investors transfer their holdings into custodianship for various purposes other than immediate sale.
According to data shared by BTC-ECHO analyst Leon WaidmannSourced from Glassnode, the percentage of circulating Ether supply held on exchanges is currently at the lowest level in recent years, standing at just 10.6%.
The reduction in available supply on exchanges could contribute to increasing demand pressure on Ether. Bloomberg ETF Analyst Eric Balchunas suggests “legitimate possibility” of Ether ETF launch by end of June.
Some analysts speculate that ETH spot ETF trading could increase demand for Ethereum.
Pushing the price beyond the all-time high of $4,870 reached in November 2021, similar to the effect observed with Bitcoin after the introduction of spot Bitcoin ETFs in January.
Political influence on the approval of spot ETFs on Ethereum
Compared to BitcoinEther could benefit even more from demand pressures due to its lower “structural selling pressure,” as noted in a DeFi analyst report. Michel Nadeau.
While Bitcoin miners occasionally sell BTC to cover mining expenses, Ethereum validators do not face the same operational costs. Potentially contribute to better Ether price performance.
However, concerns exist regarding the influence of the Ethereum Trust (ETHE) by shades of grey, which manages 11 billion dollars in funds, on the evolution of Ether prices.
If it follows the Grayscale Bitcoin Trust (GBTC) model, significant ETHE outflows could occur, influencing the price of Ether.
Bloomberg ETF Analyst James Seyffart considers that the approval of spot ETFs on Ethereum was probably influenced by political decisions rather than purely financial considerations.
In a recent interview, Seyffart suggested that the political climate, including the actions of Biden administration and responses from the crypto community played a significant role in the approval.
Seyffart also noted that besides Bitcoin and Ethereum, the approval of other ETFs on cryptocurrencyincluding Solanais unlikely without significant regulatory changes.
He indeed stressed the need for a regulated market to monitor these assets for fraud and manipulation.
On the other hand, the cryptocurrency investor and trader Brian Kelly suggested that Solana could potentially become the next cryptocurrency to have a spot ETF in the United States.
In a recent episode of CNBC’s “Fast Money,” Kelly, founder and CEO of the BKCM Digital Asset Fund, raised the question:
“The problem now is who is next? You have to consider Solana as probably next. Bitcoin, Ethereum and Solana are probably the big three in this cycle.