- Ethereum experienced financial losses in Q2, yet prices rose after U.S. ETF approvals.
- Post-ETF approval, over $3 billion in Ethereum was moved from centralized exchanges, reducing available supply.
During the second quarter of the year, Ethereum experienced negative financial results, reflected in an unprofitable period. However, Ethereum’s price increased following the announcement of the approval of Ethereum exchange-traded funds (ETFs).
$ETH needs more L2 subscriptions. pic.twitter.com/FXw0BRP62f
— Token Terminal (@tokenterminal) June 2, 2024
On May 23, after these ETFs were approved, more than $3 billion worth of Ethereum was withdrawn from centralized exchanges. This suggests a reduction in the supply of Ethereum available for sale, as investors chose to hold their assets in personal custody, likely with long-term investment intentions.
This movement reduced the amount of Ethereum available on exchanges to just 10.6% of the total, the lowest level in several years. This shift in supply, coupled with an increase in demand following the ETF approvals, could positively influence Ethereum’s price.
Concerns exist about how the Grayscale Ethereum Trust, which manages $11 billion, might affect Ethereum’s price. This is based on observed behavior in the Grayscale Bitcoin Trust, which saw significant outflows following its approval.
In terms of market price, at the time of publication, Ethereum was trading at $3,833.59, with an increase of 1.19% in the last 24 hours.
Despite a slight decrease in interest from both large and small investors in recent days, the sales have not been enough to negatively impact the price.
