KEY POINTS
Since the U.S. approved spot Ether ETFs on May 23, over $3 billion of Ether has left centralized exchanges, hinting at a possible supply crunch.
From May 23 to June 2, exchanges saw a drop of about 797,000 Ether, worth roughly $3.02 billion, as per CryptoQuant’s figures.
Spot Ether ETFs Pave the Way to All-Time Highs
With exchange reserves dwindling, it suggests that fewer coins are up for grabs, with investors opting for personal custody, not necessarily for quick sales.
Leon Waidmann, an analyst with BTC-ECHO, citing Glassnode, notes that the share of Ether in circulation on exchanges has dipped to a multi-year low of just 10.6%.
Recently, Bloomberg’s ETF expert, Eric Balchunas, suggested that Ether ETFs might debut by the end of June. Some market watchers are predicting that Ether could surpass its November 2021 peak of $4,870 once these ETFs begin trading, potentially mirroring Bitcoin’s surge post the launch of its own spot ETFs in January.
Ether might even outpace Bitcoin in terms of demand-driven gains, as it’s not subject to the same “structural sell pressure,” according to DeFi crypto analyst Michael Nadeau in his May 28 report. For instance, Bitcoin miners sometimes need to sell off BTC to fund their operations, whereas Ethereum validators don’t face similar costs.
Concerns Over Grayscale’s Ethereum Trust (ETHE)
Meanwhile, there’s some worry that Grayscale’s Ethereum Trust (ETHE), with its $11 billion management, could sway Ether’s market movements if it takes a page from the Grayscale Bitcoin Trust (GBTC), which experienced $6.5 billion in outflows the month following its approval.
At present, Ether’s price stands at $3,781, a 0.82% decrease over the last day and about 23% below its record high, according to data from CoinMarketCap.
