Ethereum Down 9% Despite ETFs: What Is Going On?
By Benzinga
Ethereum’s (CRYPTO: ETH) poor price performance two days into ETF trading sparked debate among traders about whether the price slide is only temporary.
What Happened: Crypto analyst Michaël van de Poppe questioned the lack of immediate market movement despite record-breaking ETF inflows of $1 billion. He likens the surprising lack of price action to that of the Bitcoin (CRYPTO: BTC) ETFs, predicting a significant effect on the Ethereum ecosystem.
He also pointed out the substantial volume of the Ethereum ETF on its first day, reaching $1.1 billion compared to the Bitcoin ETF’s first-day volume of $4.6 billion.
Van de Poppe attributed the stagnant price to the substantial outflow from the Grayscale Ethereum Trust (NYSE:ETHE). The Grayscale Bitcoin Trust (OTC:GBTC) had a similar effect on Bitcoin’s price following its ETF launch. He predicts a rally from $3,500 to $7,000-7,500 in one to two weeks, stating that the Ethereum ecosystem is massively undervalued.
Van de Poppe is holding on to his altcoin positions especially the ones on the Ethereum ecosystem, which could rally after a long 2.5-year bear market.
Also Read: Will Ethereum ETFs Help ‘Break This Consolidation And Head Towards An All-Time High’?
Why It Matters: Van de Poppe pointed out that the Ethereum ETF could have a larger impact on Ethereum’s price action due to a low amount of issuance. The net inflow of Ethereum on day one was $110 million, compared to Bitcoin’s $655 million.
IntoTheBlock data shows a 24% increase in large transaction volume and daily active addresses rising by 2.3% in the past 24 hours. Exchanges’ netflows decreased by 78.7% and around 72% of Ethereum holders are in profit.
Lookonchain data revealed a “diamond hand” trader withdrawing 96,639 ETH, worth $151.42 million, from Coinbase at $1,567 between Sep. 3 and Sep. 7, 2022. The trader started depositing 40,000 ETH on the Kraken exchange from March 6 this year. This leaves him with 56,639 ETH, worth $193.7 million, taking a total profit of $178.6 million. Today he deposited another 10,000 ETH for profit.
What’s Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Read Next:
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
