Exchanges have seen outflows of USD $3 billion in ETH since approval of the ETF – DiarioBitcoin
By Hannah Perez
Ethereum reserves on centralized exchanges fell to multi-year lows, according to data from CryptoQuant. Only 10% of the circulating supply of ETH is held on exchanges.
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- Nearly 800,000 ETH left exchanges following ETF approval in the US.
- Only 10.6% of circulating ETH supply is held on centralized exchanges
- A bullish price signal for Ethereum?
Cryptocurrency exchanges have seen a major exodus in reserves of Ethereum (ETH) since the recent approval of exchange-traded funds (ETFs) in the United States.
An analytics platform analyst CryptoQuantunder the name Burakkesmeci, noticed that users of centralized cryptocurrency exchanges have been withdrawing their funds in ETH en masse in the last week.
In particular, the exchanges They have registered a departure of more than 800,000 tokens valued at around $3 billion since May 24, a trend that has seen ETH reserves on platforms decline to a multi-year low.
According to the data of CryptoQuant, dating back to June 2021, the reserve on exchanges currently hovers around 13.6 million ETH. The number of coins stored in the exchanges has followed a decreasing line since the data began to be tracked, as seen in the reserves graph.
Meanwhile, a separate chart on glassnodeshared by the analyst of BTC-ECHOLeon Waidmann, aligns with this trend by showing that the percentage of circulating supply of Ethereum Held on exchanges is also at its lowest level in several years, as just 10.6% of ETH in circulation on platforms.
ETH outflows after ETF approval
Cryptocurrency outflows from trading platforms are seen as a selling indicator by traders, which in turn is interpreted as a bullish signal for prices, as it suggests higher demand.
The recent exodus of ETH from exchanges comes as the US Securities and Exchange Commission (SEC) approved the first ETH ETFs. Ethereum cash. Regulators gave the go-ahead to eight products, including those from BlackRock, Fidelity and Grayscaleand now the group awaits final approval for its official listing on local stock exchanges.
There is a possibility that withdrawals in exchanges are related to this approval, as suggested by Burakkesmeci. Some days ago, BlackRock announced an initial investment of USD $10 million in its ETF Ethereum spot, a pre-trading requirement that indicates the company is adding coins to its fund to meet investor demand.
“For now we do not know who is behind these purchases. However, we have seen similar situations following the approval of the Bitcoin Spot ETF“wrote the analyst CryptoQuant.
“Who is behind the purchases that exceed $3 billion? I can give two different answers to this question. Whales or people who think the price will increase after the approval of the spot ETF. Institutions preparing for spot ETF could be behind this wave of strong outflows that lasted 8 days“he continued.
Positive for price in the short term?
“These institutions may want to meet the demand of their investors with the launch of the ETH Spot ETF. Each of the answers above are assumptions.“he added, suggesting that the movement of coins out of exchanges could have a “positive impact on price in the medium term“.
The analysts of Bernstein they estimated that Ethereum could rebound above USD $6,000, reaching a new historical price high, after the approval of ETFs in the United States. Meanwhile, the team Standard Chartered goes even further, placing a price target of USD $8,000 for ETH by the end of 2024.
At the time of publication, ETH changes hands around USD $3,800, down 3.4% on the week and a gain of almost 100% in the last year, according to data from CoinMarketCap.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.
