YEREVAN ( — Over $3 billion worth of Ether (ETH) has been removed from centralized crypto exchanges since the approval of spot Ether exchange-traded funds (ETFs) in the United States on May 23. According to data from CryptoQuant, the amount of Ether on exchanges fell by around 797,000 between May 23 and June 2, equivalent to $3.02 billion.

Ethereum Exchange Reserve Decline (Source: CryptoQuant)
Ethereum Exchange Reserve Decline. Source: CryptoQuant

Lower exchange reserves mean fewer coins are available for sale, as investors move their coins to self-custody, indicating a preference for long-term holding over short-term trading.

Ether Exchanges Drops to Lowest Ever

Glassnode data, shared by BTC-ECHO analyst Leon Waidmann, shows that the percentage of circulating Ether supply held on exchanges is at its lowest level in years, currently at just 10.6%. This decline in exchange reserves could have significant implications for the market.

Record Low Exchange Balances for BTC and ETH (Source:
Record Low Exchange Balances for BTC and ETH. Source: Leon Waidmann

As more Ether is moved off exchanges, the reduced availability could lead to increased price volatility. With fewer coins available for trading, the market may experience sharper price movements.

Ether ETFs May Boost Prices to New Highs

Last week, Bloomberg ETF analyst Eric Balchunas indicated that Ether ETFs have a “legit possibility” of launching by late June.

Source: Eric Balchunas
Source: Eric Balchunas

Some analysts believe that once spot Ether ETFs start trading, the increased demand could drive Ether to break its November 2021 all-time high of $4,870.

The launch of spot Ether ETFs is expected to attract a lot of investor interest, similar to what happened with Bitcoin ETFs in January. BitMEX Research shows that Bitwise’s BITB had the highest inflows on the first day with $237.9 million, followed by Fidelity’s FBTC with $227 million, and BlackRock’s IBIT with $111.7 million.

Flows for spot Bitcoin ETFs from Jan. 11 to March 9. Source: BitMEX Research.
Flows for spot Bitcoin ETFs from Jan. 11 to March 9. Source: BitMEX

Michael Nadeau, a DeFi report crypto analyst, noted in a May 28 report that Ether could benefit even further from demand pressures than Bitcoin. Unlike Bitcoin miners, who must sell BTC to cover mining costs, Ethereum validators do not face the same operating expenses.

Grayscale Ethereum Trust Raises Price Concerns

Despite the optimism surrounding Ether ETFs, there are concerns about the potential impact of Grayscale’s Ethereum Trust (ETHE), which manages $11 billion in funds. If ETHE follows the pattern of the Grayscale Bitcoin Trust (GBTC), which saw $6.5 billion in outflows in the first month after approval, it could influence Ether’s price action.

Currently, Ether is trading at $3,791, down 0.82% over the past 24 hours and around 23% below its all-time high, according to CoinMarketCap.

Ethereum Daily Price Fluctuations (Source: CoinMarketCap
Ethereum Daily Price Fluctuations. Source: CoinMarketCap

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