Ethereum‘s price may decline after the initial excitement surrounding spot Ethereum exchange-traded funds (ETF) fades, especially if its supply continues to grow at the current rate, according to an analyst.

“If the supply of ETH keeps increasing by ~60k/month like it has been since April, then by Dec the supply will be back to what it was at the merge,” noted crypto trader and Into The Cryptoverse founder Benjamin Cowen in a July 19 X post.

This refers to the period when Ethereum transitioned to its proof-of-stake consensus model in September 2022.

Post-Merge, Ethereum became deflationary, reducing its supply by approximately 455,000 ETH by April 2024.

However, since then, the supply has increased by about 150,000 ETH. Cowen suggests that if this trend continues, Ethereum’s supply might revert to pre-Merge levels.

“If the supply of ETH keeps increasing at 60,000 ETH per month, then we will see the supply revert to what it was back at the merge,” Cowen reiterated.

He also highlighted, “If it follows 2016, then ETH/BTC final capitulation will not start until September 2024, which would be enough time for the novelty of the spot ETF relative to BTC to potentially wear off.”

Cowen predicts Ether’s price might drop within the next “3-6 months,” despite his belief that in 1.5 years, the price will “likely be higher” than its current value.

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At the time of publication, Ether is trading at $3,507, according to CoinMarketCap.

Onchain analyst Leon Waidmann recently highlighted a “supply crisis” for Ethereum, pointing out that exchange balances have dropped to 10.2% while 39.3% of ETH is locked in smart contracts.

“Most investors don’t realize how tight the ETH supply side is,” Waidmann noted in a July 16 X post.

Meanwhile, the Chicago Board Options Exchange (CBOE) announced on July 19 that five spot Ethereum ETFs would begin trading on July 23, pending regulatory approval.

These include the 21Shares Core Ethereum ETF, Fidelity Ethereum Fund, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and Franklin Ethereum ETF.

On May 23, the United States Securities and Exchange Commission (SEC) approved rule changes allowing the listing of several spot Ether ETFs.

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