- SEC approval of Ethereum Spot ETF leads to significant withdrawals of ETH from exchanges.
- Analyst Burak Kesmeci suggests two reasons for the withdrawals.
- This trend echoes similar occurrences observed after the approval of the Bitcoin Spot ETF.
The SEC’s approval of the Ethereum Spot ETF on May 24, 2024, has triggered increased movement of ETH holdings across crypto exchanges. As reported by Cryptoquant, approximately 800,000 ETH valued at $3 billion were withdrawn from exchanges within eight days. However, the identity of those responsible for these large-scale withdrawals remains unknown.
This trend echoes similar activity observed after the approval of the Bitcoin Spot ETF. Crypto analyst Burak Kesmeci offers two possible reasons for these massive withdrawals.
Kesmeci suggested that large market players, commonly called whales, may have anticipated a surge in Ethereum’s value following ETF approval. This outlook could have driven their decision to accumulate substantial holdings ahead of anticipated market movements.
The analyst also added that the heavy outflows could be caused by institutions positioning themselves for the launch of the ETH Spot ETF. As a result, these institutions may be bolstering their Ethereum reserves to meet investor demand upon the ETF’s launch.
Nonetheless, market experts expect the withdrawals to have a positive impact on Ethereum’s price trajectory in the medium term. The reduced circulation of ETH will likely exert upward price pressure, strengthening ETH’s bullish outlook in the coming months.
Insights from Intotheblock revealed heightened accumulation of Ethereum by whale investors. According to Intotheblock’s findings released on May 31st, 41% of crypto wallets now hold more than 1% of the total Ethereum. This figure represents a 36% increase from the first quarter of 2024. Moreover, the spike in ETH holdings indicates growing confidence among major stakeholders in Ethereum’s prospects.
Industry expert Michael Nadeau predicted a potential influx of institutional interest in Ethereum. Nadeau based his prediction on factors like the absence of structural selling pressures faced by Bitcoin miners, the Ethereum staking feature, and its pivotal role in the Web3 ecosystem.
Despite these promising developments, Ethereum was mostly flat on Monday. The cryptocurrency traded at $3,811, indicating a modest 0.89% increase over the past 24 hours.
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