Creative Translation: “ETF Approval Unleashes Nearly 790,000 Tether Reserves from Exchange, Valued at $3 Billion”

Creative Translation: "ETF Approval Unleashes Nearly 790,000 Tether Reserves from Exchange, Valued at $3 Billion"

Creative Translation: "ETF Approval Unleashes Nearly 790,000 Tether Reserves from Exchange, Valued at $3 Billion"

According to a report by Cointelegraph, since the US Securities and Exchange Commission (SEC) approved key regulatory documents related to Ethereum spot ETF on May 23, over $3 billion worth of Ether (ETH) has flowed out from centralized cryptocurrency exchanges, indicating a potential supply squeeze.

According to blockchain data analytics firm CryptoQuant, the amount of Ether on exchanges decreased by about 797,000 ETH, equivalent to $3.02 billion, between May 23 and June 2. Lower exchange reserves imply a decrease in the available supply of coins for sale as investors move their coins to self-custody wallets instead of keeping them available for sale on exchanges.

Data shared by analyst Leon Waidmann from Glassnode shows that the circulating supply ratio of Ether held by exchanges has also reached its lowest level in years, standing at only 10.6%.

Investors still need to wait for the SEC’s approval of the S-1 registration statement submitted by fund issuers before trading Ethereum spot ETF can begin. Some analysts believe that once such ETFs start trading, the price of Ether may surpass its previous all-time high of $4,870 set in November 2021, similar to the situation with Bitcoin after the launch of spot ETFs.

However, some are concerned that the conversion of the Grayscale Ethereum Trust (ETHE) to an ETF may exert downward pressure on the price of Ether. According to a previous report by Zombit, research teams from cryptocurrency data provider Kaiko believe that ETHE may experience daily outflows of $110 million if it follows a similar pattern to the Grayscale Bitcoin Trust (GBTC) in the first month after conversion.

In a report released last week, analysts from JPMorgan expressed that the demand for Ethereum spot ETF would be significantly lower than similar Bitcoin fund products for various reasons, and they expect ETHE to see outflows of $1 billion.