The eagerly anticipated launch of Ether (ETH) exchange-traded funds (ETFs) is expected to cause a shortage of supply, resulting in a subsequent increase in price. This aligns with a report from Crypto News Flash, which reveals that over $3 billion worth of ETH has been withdrawn from centralized exchanges for self-custody purposes.
Crypto investors are eagerly awaiting the official launch of the recently approved spot Ether ETFs, pending the final approval of the S-1 registration forms submitted by potential issuers. Bloomberg analyst James Seyffart believes that the US Securities and Exchange Commission (SEC) may approve them this month, given the close collaboration between the issuer and the regulator.
Analysts have noted that the official launch of Ether ETFs could lead to a shortage of supply in the market. Integral, a crypto accounting software firm, explains that ETF issuers will purchase and hold a large amount of ETH, effectively reducing the available supply and driving up the price. Moreover, a report from Crypto News Flash reveals that exchange reserves have reached a six-year low, with over $3 billion worth of ETH removed since the approval of ETFs on May 23.
According to Integral, the supply shortage could be exacerbated by the increasing trend of staking. Currently, 25% of the ETH supply is staked. While ETF issuers may not directly engage in staking, the rising price of ETH could benefit staking participants.
This groundbreaking development of Ether ETFs is expected to increase institutional adoption of ETH, thereby validating crypto as an asset class. Additionally, it may lead to the emergence of an “altcoin season” as the demand for ETH spills over into other cryptocurrencies.
BlackRock and Fidelity have already experienced success with their IBIT and FBTC funds, respectively, which have seen significant inflows. BlackRock’s IBIT alone accounted for 26% of its $65 billion ETF inflows this year, making it the largest ETF issuer in the US. Fidelity’s FBTC fund accounted for 56% of its $15.8 billion total ETF flows, with $8.9 billion inflows recorded to date. These numbers have sparked speculation about whether Ethereum will follow a similar trend to Bitcoin.
Currently, ETH is trading at $3,774, experiencing a 1% decline in the last 24 hours and a 2% decline in the last seven days. However, it still boasts a positive gain of 21% in the last 30 days, with a 15.3% increase in its 24-hour trading volume.
Crypto analyst Michael van de Poppe believes that ETH is gaining momentum and is poised to reach a new all-time high price.
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