Since the approval of spot Ether exchange-traded funds (ETFs) in the United States on May 23, over $3 billion worth of Ether (ETH) has been withdrawn from centralized crypto exchanges.
This significant movement signals a potential forthcoming supply shortage. Data from CryptoQuant reveals a decrease of approximately 797,000 Ether, equivalent to $3.02 billion, between May 23 and June 2. The decline in exchange reserves suggests a decrease in available coins for sale as investors transfer their holdings to self-custody for various purposes, not necessarily for immediate selling.
Additionally, Glassnode data, as shared by BTC-ECHO analyst Leon Waidmann, indicates that the percentage of circulating Ether supply held on exchanges has reached its lowest level in years, currently standing at just 10.6%.
Ethereum ETFs blaze a trail to the ATH
Eric Balchunas, a Bloomberg ETF analyst, predicted last week that Ether ETFs would launch by the end of June.
Due to growing demand pressure, some analysts predict Ether will break its all-time high of $4,870 in November 2021 after spot Ether ETFs begin trading. This would be similar to what happened to Bitcoin following the trading launch of spot Bitcoin ETFs in January.
Since Ether is not subject to the same "structural sell pressure" as Bitcoin, it may gain even more from demand pressures, according to crypto expert Michael Nadeau of DeFi report, who published a research on May 28.
For example, Ethereum validators do not have the same running costs as Bitcoin miners, but Bitcoin miners are periodically compelled to sell BTC in order to pay for their mining expenses.
But there are also worries that if Grayscale's Ethereum Trust (ETHE), which oversees $11 billion in assets, follows the Grayscale Bitcoin Trust (GBTC), which experienced $6.5 billion in withdrawals in its first month of approval, it may have an impact on Ether's price movement.
According to CoinMarketCap, the price of ether is currently $3,781, down 0.82% from the previous day and almost 23% below its all-time high.
June 2024, Cryptoniteuae