Several major culprits have surfaced in this round of plunge:
The first to be affected was the launch of the Ethereum ETF. Grayscale Fund, a big player in the market, has a rule of only taking in and not taking out, in other words, locking up. Think about those Ethereum believers who have held coins for many years. Their cost line is surprisingly low, and it is common to see coins below $1,200. But as Grayscale Fund transformed into the Ethereum ETF, these coins can finally be cashed out. So, those early architects and investors began to sell. The same logic applies to the callback of Bitcoin ETF.
Let's take a look at the selling pressure caused by the Mentougou incident. 50,000 bitcoins were generously paid to five exchanges. The cost of these lucky people was shockingly low, probably just a few hundred dollars. If it were you or me, facing this astronomical figure that soared from a few hundred dollars to 60,000 or 70,000 dollars, who would not be tempted and want to cash out?
The sharp drop in US stocks made matters worse. The Nasdaq index plummeted by 3.6%, but the net inflow of ETF funds exceeded 80 million US dollars. Bitcoin, as the younger brother of US stocks, naturally could not escape the disaster and fell along with its big brother.
When will ETH be able to gain a foothold?
We have to wait until the Ethereum ETF continues to receive positive inflows, which will be a sign of stabilization.
Looking at the trading of Ethereum spot ETFs, it is extremely popular. The trading volume is rising steadily, which shows that the market's recognition of this investment method is getting higher and higher. The dominant position of Grayscale Ethereum Trust in trading volume further demonstrates the weight and charm of this fund in the market.
I still say that the future of ETH is worth looking forward to. A pullback is often a good time to enter the market, so cherish it!
