Investors are massively withdrawing their Ethereum holdings from major crypto exchange platforms, as speculation mounts over the imminent launch of Ethereum ETFs by US regulators.
Massive Ethereum exit from crypto exchanges since ETF approval
According to data from CryptoQuant, a colossal quantity of 797,000 Ethereum, equivalent to $3.02 billion was withdrawn from centralized crypto exchanges between May 23 and June 2. This massive haemorrhage, which reduced to 10.6% the total share of Ether held on these platforms, an all-time low not seen for years, testifies to a massive exodus of investors to personal portfolios.
This rush comes amid the long-awaited prospect of the SEC giving the green light to the very first Ethereum-backed ETFs. Last week, Eric Balchunas, Bloomberg ETF analyst said there was a “real opportunity” for these instruments to be launched by the end of June.
If so, this could be the trigger for a spectacular surge in the price of Ether. According to Michael Nadeau, crypto analyst specialized in decentralized financedemand could even be higher than for Bitcoin, as Ethereum is not constrained by the same “structural selling pressures” that BTC miners face in financing their operational costs.
Watch out for the risk of increased volatility
Some analysts, however, warn of the risk of excessive price volatility if the Ethereum Trust fund from Grayscale followed in the footsteps of Grayscale Bitcoin Trust (GBTC), which has suffered massive capital outflows after its approval.
Ether is currently trading at around $3,800, 23% below its all-time high.
The approval of Ethereum ETF could rekindle the fuse for another bullish rally for the world’s second-largest cryptocurrency. Investors already appear to be positioning themselves by strategically withdrawing their holdings from exchanges, in anticipation of an imminent launch.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
