Ethereum Price Plunges 26% Since ETF Launch, Supply Increases by 60,500 ETH
Date: 2024-08-20 Author: Henry Casey Categories: CRYPTO PAYMENTS
Ethereum Price Plunges
The price of Ethereum (ETH) is in a significant downtrend despite the launch of the first Ethereum spot exchange-traded funds (ETFs) in the United States. Over the past month, the price of ETH has fallen more than 26%, to $2,572 on August 19. This historic ETF debut, which was expected to be a positive catalyst for the market, failed to support the asset’s price.
Selling Pressure and ETF Outflows
On the contrary, the ETFs may have been one of the reasons for the price drop. Since its launch, US-based Ethereum ETFs have seen outflows of $420.5 million, putting significant pressure on the market, especially from Grayscale ETHE. This data was provided by Farside Investors.
Earlier, many expected the launch of the Ethereum ETF to be accompanied by a price increase, as happened with Bitcoin ETFs, which brought in about 75% of new investments in Bitcoin by February 2023. However, this time, investors' expectations were not met.
Ethereum Supply Growth
In addition to the pressure from the ETFs, the increase in the Ethereum supply could also have an impact on its price decline. Since the launch of the spot Ethereum ETFs on July 23, the ETH supply has increased by 60,555 coins, which is more than $155 million at current prices. According to Ultrasound.money, the ETH supply growth rate over the past 30 days was 0.61% per year.
Dencun Upgrade and its Impact on Price
The Dencun upgrade, the biggest Ethereum upgrade since the Merge, was launched on the mainnet on March 13 and promised to reduce transaction fees and improve network scalability. However, despite the upgrade, the Ethereum price continues to struggle. According to analytics firm CryptoQuant, the ETH supply has increased by over 197,000 coins, while the price has fallen by 35%.
Future Predictions
However, some analysts remain optimistic. Popular crypto trader Ted has suggested that Ethereum will see a consolidation breakout in November or December 2024, with a parabolic rally beginning in Q1 2025.
