The Ethereum Spot ETF was approved on 24 May 2024. After this event, anonymous persons or organizations have transferred more than 800k Ethereum out of exchanges, which is equivalent to $3 billion in eight days. It is still unknown who is buying these products now. This movement indicates that individuals are transferring their ETH to personal wallets likely in preparation for a bull run.
Over 800,000 #Ethereum Outflow From Exchanges Following $ETH Spot ETF Approval“Institutions preparing for the Spot ETF could be behind this wave of heavy outflow that lasted for 8 days.” – By @burak_kesmeci Read more 👇https://t.co/LM4eJ7nNjr
— CryptoQuant.com (@cryptoquant_com) June 3, 2024
Ethereum Scarcity Expected as 800K ETH Withdrawn After ETF Approval
The approval of the Bitcoin Spot ETF resulted in similar situations in the past. This question has effectively two possible answers. It could be that whales or retail investors, anticipating ETH price growth after Spot ETF approval, are emptying their wallets.
Institutions were also likely at the wheel with the heavy outflow in preparation for the incoming Ethereum Spot ETF. One perspective holds that these institutions are buying Ethereum mainly to prepare for the demand from their customers as soon as the ETF goes live. They want to become the holders of large collection of Ethereum to circumvent any possible upcoming shortages of supply. The withdrawal of over 800,000 Ethereum in just eight days is likely to have a positive impact on its price in the medium term.
The movement of large amounts of a cryptocurrency off exchanges usually signifies an intention for the holders to keep them for an extended period. This limits the number of units available on the open market, potentially raising the price by creating additional scarcity. Moreover, the approval of the Ethereum Spot ETF is a vote of market confidence on its own.
Crypto Community Awaits Impact of Ethereum Spot ETF on Market
This can make Ethereum accessible to an even larger group of investors, many who might be reluctant to invest in cryptocurrencies in a direct manner. With the ETF, which is a regulated and known entity for investment, it becomes much more secure and way more within reach of traditional investors.
Ultimately, the effect of the Ethereum Spot ETF has been felt by the market. The cryptocurrency community is observing closely to see where this plays out in regard to the success of Ethereum, with more than $3 billion in Ethereum pulled out of exchanges in over a week. The market is gradually adapting to these improvements. In turn, the price of Ethereum is expected to respond by what seems to be becoming an increasing sentiment of excitement.