As the cryptocurrency market awaits regulatory approval for spot Ethereum exchange-traded funds (ETFs), an Ethereum whale withdrew 16,449 ETH from Binance, worth approximately $50.3 million. The massive transfer, tracked by on-chain analytics firm Spot On Chain, marked the whale’s first significant accumulation of ether, with all funds being moved to a new wallet address.
The timing is noteworthy as it coincides with the upcoming launch of a spot Ethereum exchange-traded fund (ETF) in the United States. The U.S. Securities and Exchange Commission (SEC) approved key filings for the ETFs in May, although final approval of S-1 registration forms for eight asset managers is still pending.
Spot On Chain said the withdrawal signals a bullish outlook for Ethereum. ETH-based ETFs are expected to be listed on U.S. exchanges, which will significantly increase institutional demand and investment, potentially pushing the price of Ethereum higher. Cryptocurrency industry insiders predict these spot ether ETFs could attract as much as $15 billion in inflows in the first 18 months, matching the performance of a spot bitcoin ETF launched in January.
Data from market intelligence platform IntoTheBlock shows that the ratio of net flows between large holders and exchanges increased by 132% last week, indicating that Ethereum whales are actively accumulating. Additionally, exchange inflows fell by more than 11% while outflows increased by 3%, meaning investors are more inclined to hold and accumulate ETH rather than sell.
Research firm Matrixport predicts a sharp rebound in Ethereum prices, driven by the expected launch of a spot Ethereum ETF. That sentiment was echoed by Bloomberg analyst James Seyffart, who noted that fund issuers have responded to most of the comments made by the SEC in their S-1 filings, suggesting the ETFs could begin trading soon.
Cryptocurrency analyst Leon Waidmann highlighted Ethereum’s supply dynamics, noting that 40% of ETH’s supply is locked, with 28% staked and 12% held in smart contracts and bridges. He expects that the launch of a spot Ethereum ETF will further reduce the available supply as institutional investors buy large amounts of ETH, creating a supply-demand imbalance that will drive up prices. Analyst Follis also compared Ethereum’s current chart to Bitcoin’s performance before it soared 200% last year, suggesting these ETFs could be a similar catalyst for Ethereum.
The SEC’s approval process for an Ethereum ETF has been slower than expected. The ETFs could debut next week or the week of July 15, said Bloomberg ETF analyst James Seyffart. The reason for the delay is the SEC's comprehensive review process, which requires asset managers to provide full disclosures.
SEC Chairman Gensler said last month that an Ethereum ETF could be approved by “late summer.”
Amid the impending launch of an Ethereum ETF, an Ethereum ETF fee war has begun. Invesco and Galaxy proposed a management fee of 0.25%, slightly higher than VanEck's 0.20%. Bitwise Chief Compliance Officer Katherine Dowling mentioned that although there is no firm timetable, the approval process is nearing completion and there are fewer and fewer controversial issues between the SEC and ETF providers.
After losing 20% of its value in the four weeks to July 5, the price of Ethereum has rebounded, surpassing the key $3,000 mark. As of this writing, Ethereum is trading at $3,102, with daily gains of 1%.
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