Ethereum ETF Momentum
Market trends and dynamics surrounding the approval of the ETH spot ETF.
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This week, we delve into the notable surge in ETH’s market activity following the approval of its ETFs, sparking significant trading volumes and a pronounced interest from ETH whales. We explore the impact of these developments on the current holders and the overall market dynamics.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Ethereum saw its largest weekly increase in total fees in the past two months, driven by heightened activity following the ETF news.
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- $163 million worth of ETH was withdrawn from exchanges this week, amid growing anticipation of its ETF approval.
Shift in Winds
As the US presidential elections approach, the stance toward the cryptocurrency sector is beginning to change. Both political parties are attempting to attract voters by adopting policies favorable to the industry. This week marked several significant milestones, including the approval of the ETH ETF and the passage of a crucial U.S. cryptocurrency related bill, FIT21, through the House of Representatives. Additionally, presidential candidate Donald Trump has begun to accept various cryptocurrencies as donations for his campaign, signaling a potentially favorable stance towards the industry.
On Monday, Bloomberg analysts Eric Balchunas and James Seyffart revised their ETH ETF approval odds to 75% from the previous 25%, triggering a widespread surge in the market.
- Ether surged more than 17%, while Bitcoin reclaimed the $71,000 mark for the first time since early April.
- The Polymarket betting site saw a significant shift in the market regarding the approval of an Ethereum ETF by May 31. The probability jumped from 10% at the beginning of the week to 65% by Wednesday the 22nd.
- Furthermore, all the revised versions of the ETH ETF have eliminated the provisions for staking Ether, which some believe was creating a regulatory obstacle.
With ETH’s price increasing by 30% over the past seven days, 95% of current positions are now in profitable trades.
- This level of profitability hasn’t been observed since November 2021, when ETH prices soared to an all-time high.
- There is minimal resistance to the volume of ETH purchased at prices higher than current levels. Specifically, 3.57 million ETH were bought in the price range of $3800 to $4800, compared to 53.54 million ETH purchased between $2160 and $2650.
Following the increased odds of ETF approval, ETH whales have also begun to make significant moves.
- On Tuesday the 21st, ETH recorded an on-chain trading volume of $15.98 billion, marking the highest volume recorded since June 13th, 2022.
- Of the $15.98 billion in trading volume recorded, $14.33 billion came from transactions exceeding $100,000, typically conducted by whales. This represents 90% of the total traded volume for this day.
- This trend could be expected to accelerate now that the ETFs have indeed been approved.
The approval of the ETH ETFs marks a significant milestone in cryptocurrency acceptance, likely influencing increased activity among ETH whales as reflected by recent large-volume transactions. The shifting landscape, underscored by substantial on-chain trading volumes, suggests a growing institutional and investor confidence in Ethereum. This trend is poised to gain momentum, potentially leading to even greater market movements.
