Institutional demand for Ethereum is anticipated to rise after the SEC approved spot Ethereum ETFs. Crypto whales are driving large-volume Ethereum transactions, according to on-chain statistics.
Analysts expect these changes to cause a demand shock, affecting Ethereum market dynamics. Newly authorized ETFs may reduce supply for the second-largest cryptocurrency by market valuation.
Only 12.78 million ETH, 11% of the entire supply, is accessible on controlled exchanges, an eight-year low. Investors are withdrawing ETH from exchanges as institutional demand rises, analysts say. Declining exchange balances usually indicates that investors anticipate prices to rise and will not sell soon.
This week, the SEC authorized three Ethereum ETFs, which many expect to drive cryptocurrency demand.
Since January, spot Bitcoin ETFs have garnered institutional interest, according to Alluvial CEO Mara Schmiedt. Institutional desire for BTC is increasing as these ETFs hold 800,000. She expects Ethereum to have comparable demand, causing a shock.
What happens if $20 billion leaves the market? It might skew supply and demand. Schmiedt said the market has never experienced such a sudden demand shock.
Institutional activity on Ethereum is rising. Blockchain analytics tool IntoTheBlock said that crypto whales drove on-chain trade volume to a two-year high of $15.98 billion ahead of Ethereum ETF approval. This included $14.33 billion in transactions exceeding $100,000, 90% of the day’s traffic.
ETH ETF certification is a milestone in crypto adoption and may promote whale behavior, as witnessed in recent huge transactions, according to IntoTheBlock.
Significant on-chain trade volumes indicate rising institutional and investor trust in Ethereum. This pattern may accelerate, causing bigger market fluctuations, IntoTheBlock said.
