$3B Ethereum Exodus: Crypto Exchanges Hit Hard Post-ETF Approvals

Since the approval of spot Ether exchange-traded funds (ETFs) on May 23, over $3 billion worth of Ether has been withdrawn from centralized exchanges. This movement suggests a potential supply squeeze.

Between May 23 and June 2, approximately 797,000 Ether, equivalent to $3.02 billion, left exchanges, based on CryptoQuant data. This trend indicates that fewer coins are available for sale as investors move assets to self-custody for long-term holding or other purposes.

Data from Glassnode, shared by BTC-ECHO analyst Leon Waidmann, reveals that the percentage of Ether held on exchanges has dropped to a multi-year low of 10.6%.

Bloomberg ETF analyst Eric Balchunas suggests that Ether ETFs could launch by late June. Analysts predict that the introduction of Ether ETFs might drive demand, potentially pushing Ether to surpass its previous all-time high of $4,870 from November 2021. This expectation is drawn from Bitcoin's performance post-ETF launch in January.

Michael Nadeau on Ethereum: Reduced Sell Pressure Compared to Bitcoin Due to Lower Validator Costs

Michael Nadeau, a DeFi report crypto analyst, argues that Ether might face less structural sell pressure compared to Bitcoin. Unlike Bitcoin miners, Ethereum validators do not have the same level of operating costs, which might reduce the need for selling.

Despite the optimistic outlook, there are concerns about the impact of large funds like Grayscale’s Ethereum Trust (ETHE), which manages $11 billion. If ETHE follows the trend of the Grayscale Bitcoin Trust (GBTC), which saw $6.5 billion in outflows post-approval, it could influence Ether's price.

As of now, Ether is trading at $3,813.

The significant withdrawal of Ether from exchanges indicates investor confidence in its long-term value, particularly with the anticipated launch of Ether ETFs. However, potential large-scale sell-offs from trusts like ETHE could pose risks to Ether’s price stability.