Ether Price Plummets After Launch of ETFs, Supply Surges
The introduction of the first spot Ether exchange-traded funds (ETFs) in the United States has resulted in a significant decrease in the price of Ether. This outcome, which was eagerly anticipated by investors hoping for a surge in the price of Ether, has been disappointing as Ether’s price has experienced a noticeable downtrend in recent weeks.
A key factor contributing to the decline in Ether’s price is the substantial increase in its supply. Since the launch of the spot Ether ETFs, the supply of Ether has risen by 60,555 ETH, equivalent to over $155 million at the current valuation. This surge in supply has exerted additional pressure on Ether’s price, contributing to its decline.
Furthermore, the debut of the US ETH ETFs has resulted in significant net outflows, totaling $420.5 million. This has led to additional selling pressure on Ether, with its price dropping by 26% since the launch of the ETFs, disappointing many investors who had high hopes for a positive price impact.
The challenges facing Ether’s price have been compounded by the struggles following Ethereum’s Dencun upgrade, which went live on the mainnet earlier this year. Despite the upgrade’s promise to reduce transaction fees and enhance scalability, the price of Ether has continued to face challenges, with a decrease of 35% and an increase in supply by more than 197,000 ETH.
However, despite the current downward trend, some analysts are optimistic about Ether’s future. They believe that a consolidation breakout will occur in late 2024, with a parabolic run expected in the first quarter of 2025, signaling a potential turnaround for Ether’s price.
It is evident that the launch of the Ether ETFs has not had the immediate positive impact on price that many had hoped for. With the dynamics of the cryptocurrency market being as unpredictable as they are, it remains to be seen how Ether will fare in the coming months.
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