Ethereum Sees $3B Exit from Exchanges After ETF Approvals: Is ETH Price Ready to Reach $5,000? 

• The amount of Ether (ETH) on centralized exchanges has reduced drastically by more than $3 billion as investors seek self-custody. 

• According to reports, the supply of Ether held by exchanges has dropped to 10.6%, becoming the lowest ever recorded in years. 

Crypto News Flash recently reported on the first-ever Ether ETF approval by the US Securities and Exchange Commission. Interestingly, the aftermath has been massive with reports disclosing the removal of over $3 billion worth of Ether (ETH) from centralized crypto exchanges since May 23. 

Reviewing CryptoQuant data, the amount of Ether on exchanges has fallen drastically by 797,000. Per our assessment, lower exchange reserves imply fewer tokens are available for sale as investors move their assets to self-custody.

Expectedly, this was confirmed by Glassnode data shared by BTC-ECHO analyst Leon Waidmann. In that report, circulating Ether supply in the possession of exchanges had fallen to 10.6% and appears to be the lowest it has reached in years. 

Exchange balances for both #Bitcoin and #Ethereum are at their lowest levels in years!Whales continue to accumulate. #BTC on exchanges is down to 11.6% and #ETH is at 10.6%!Supply squeeze incoming.
Get ready for the next big move. pic.twitter.com/u4j13DZBJk— Leon Waidmann | On-Chain Insights (@LeonWaidmann) June 2, 2024

According to crypto analyst Michael Nadeau, Ether has the potential to benefit from demand pressure more than Bitcoin because it does not have the same level of “structural sell pressure.” A typical example stems from the fact that Bitcoin miners occasionally sell BTC to cover the cost of mining.

Meanwhile, Ethereum validators do not incur the same operating expenses. Coupled with this price-determining factor, Bloomberg analyst James Seyffart has disclosed that the spot Ether ETF has the “legit possibility” of launching in June. 

Key Indicators Points at June as the Launching Date for Ether ETF

Just recently, BlackRock updated its S-1 form for its iShares Ethereum Trust (ETHA) for approval before the commencement of the trade. Similarly, Franklin Templeton, VanEck, and Invesco Galaxy have also updated their S-1 forms with the SEC as reported by Crypto News Flash. To Bloomberg ETF analyst James Seyffart, the BlackRock’s updated S-1 is an indication that the issuer and the regulator are working towards the launch. This development also disclosed information about its seed capital investor.

For context, it can be recalled that the investor agreed to purchase $10,000,000 in Shares on May 21, 2024, and also took delivery of 400,000 Shares at a per-share price of $25.00. Per the filing, the ETF would list and trade under the ticker ETHA.

According to crypto analyst Michaël van de Poppe, the anticipation around this ETF could see ETH surpassing its all-time high price and entering into the $5000 zone. Per his analysis, the launch could reduce the dominance of Bitcoin in the overall market cap, allowing altcoins to grow. 

The Bitcoin dominance has likely peaked this cycle at 58%. The valuations of altcoins are super low compared to Bitcoin. Likely the next all-time high is going to be reached for Ethereum.

Regardless of these positive factors, there are growing concerns that the Grayscale’s Ethereum Trust (ETHE) which manages $11 billion in funds could cause the Ether price to follow the Grayscale Bitcoin Trust (GBTC). It is important to note that the GBTC saw an outflow of $6.5 billion in just the first month of approval. 

At press time, ETH was trading at $3,815 after surging by 1% in the last 24 hours and 23% in the last 30 days.