Ethereum
Here’s Why Ethereum Didn’t Explode When ETF Launched
Arman Shirinyan
Ethereum Didn’t Skyrocket When ETF Launched, But Things Could Change Faster Than You Think
Read U.TODAY on
Google News
Ethereum The price didn’t rise in tandem with the excitement and $1.112 billion in trading volume that took place in the first few days. Investor interest was strong, thanks to the $106 million net inflow, as well as impressive numbers from ETFs like Bitwise’s ETHW ($204 million) and BlackRock’s ETHA ($266.5 million). But the market was also under heavy selling pressure thanks to the $590 million net inflow that remained after subtracting Grayscale’s withdrawals. ETHÉ.
This sudden price change was caused by a number of factors. First, there was a risk that a buy-the-rumor, sell-the-news situation would result from the huge excitement and buzz surrounding the Ethereum ETF launch.
ETH Investors could have sold their holdings to profit from the ETF launch if they had accumulated ETH in advance. Second, while the ETF’s introduction attracted institutional attention, it also drew attention to the dearth of new retail investors joining the market.
While institutional inflows are significant, the broader market sentiment remains subdued when retail investors are not participating. A bullish trend needs to be maintained by a balance between institutional inflows and retail participation. In addition, the dynamics of the broader cryptocurrency market are important.
Bitcoin suffered a similar fate before seeing significant inflows and even recovering to near $70,000. This could also apply to Ethereum If institutional investors sell enough of their holdings, we expect market liquidity to be sufficient to withstand all of this selling pressure.
About the Author
Arman Shirinyan
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with over four years of experience.
Arman strongly believes that cryptocurrencies and blockchain will be of constant use in the future. Currently, he focuses on news, articles with in-depth analysis of crypto projects, and technical analysis of cryptocurrency trading pairs.