Ethereum Price Fell 25% After ETF Launch
BITmarkets Team
Aug 20, 2024
The price of Ethereum has been on a notable downtrend, even with the historic launch of the first spot Ether exchange-traded funds (ETFs) in the United States.
Over the past month, Ether's price has dropped by more than 26%, trading at $2,572 as of 10:11 am UTC on Aug. 19, according to TradingView data.
Despite the highly anticipated launch of the spot Ether ETFs, this milestone event has not provided a boost to Ether’s price.
In fact, the ETFs might be contributing to Ether’s price decline, as the US ETH ETFs have seen a cumulative $420.5 million in net outflows since their launch, leading to significant selling pressure, according to data from Farside Investors.
Investors had expected the launch of the Ether ETFs to drive a notable price increase, similar to Bitcoin, where ETFs accounted for around 75% of new investment, pushing its price past the $50,000 mark by Feb. 15.
Additionally, Ether’s increasing supply may have played a role in the price decline.
Since the spot Ether ETFs began trading in the US on July 23, Ether's supply has grown by 60,555 ETH, valued at over $155 million at the time of writing, according to Ultrasound.money data.
This growth rate translates to a 0.61% annual increase over the past 30 days, with a yearly issuance rate of 940,000 Ether and a burn rate of 203,000.
Ethereum’s most significant upgrade since the Merge, the Dencun upgrade, went live on March 13, aiming to reduce transaction fees on layer-2 networks and improve Ethereum’s scalability.
However, since the Dencun upgrade, Ether's price has continued to struggle, as noted by onchain analytics firm CryptoQuant in an Aug. 19 X post:
“Despite the approval of Ethereum ETFs, the price of $ETH has been struggling since the Dencun upgrade. ETH supply has increased by more than 197,000 ETH, and its price has fallen by 35%.”
Looking ahead, Ether’s price could be poised for a breakout in the first quarter of 2025, based on historical chart patterns, according to popular crypto trader Ted, who stated in an Aug. 11 X post:
“The consolidation breakout will happen in November/Dec 2024, while the parabolic run will start in Q1 2025.”
Sources:
https://cointelegraph.com/news/ether-price-drops-24-despite-us-etf-launch
