Uncertainties in the Future of Ethereum! Price May Crash as Spot ETF Excitement Passes!
The price of Ethereum (ETH) may fall after the initial excitement wears off as spot Ethereum exchange-traded funds (ETFs) prepare to hit the scene in the US. Experienced analyst Benjamin Cowen predicts that if Ethereum's supply continues to increase, its price will return to the levels before The Merge update in September 2022.
In a post on July 19, Cowen said, “If the ETH supply has increased by approximately 60 thousand ETH per month since April, the supply will return to pre-The Merge levels in December.” Ethereum becoming deflationary after Merge meant that the supply decreased by approximately 455 thousand ETH by April 2024, but since this date the supply has increased by approximately 15 thousand ETH.
The analyst states that the current price of Ethereum may drop in the next few months if the supply continues to increase at this pace. He also expects the final collapse in the ETH/BTC trading parity to begin in September 2024 if it behaves similar to 2016. This could lead to spot ETFs losing relevance compared to spot Bitcoin ETFs.
As it is known, five spot Ethereum ETFs are planned to start trading on the Chicago Board Options Exchange on July 23. The US Securities and Exchange Commission (SEC) approved listing rules for spot Ethereum ETFs on May 23. ETFs to be traded include 21Shares Core Ethereum ETF, Fidelity Ethereum Fund, Invesco Galaxy #Ethereum ETF, VanEck Ethereum ETF and Franklin Ethereum ETF.
Ethereum's Supply on Exchanges Dropped to 10.2 Percent
On the other hand, on-chain analyst Leon Waidmann drew attention to Ethereum's current supply crisis. In his post on July 16, he said, “The $ETH supply on cryptocurrency exchanges dropped to 1.2 percent and 39.3 percent of ETH is locked in smart contracts.”
Waidmann pointed out that many investors are not aware of how small the circulating #ETH supply is, and underlined that this situation is extremely positive for the altcoin king.
