Whales Dump Large ETH Holdings On Exchanges; Here’s Why

Whales’ Massive ETH Sales

BlackRock’s announcement of an Ethereum exchange-traded fund (ETF) caused excitement in the Ethereum community. However, the recent decision by the United States Securities and Exchange Commission (SEC) has caused a ripple effect across the crypto landscape.

The SEC’s decision has prompted major token holders, or whales, to sell their Ether holdings, as shown by on-chain data. Accordingly, the market is reacting strongly to the regulatory delay, causing concern among investors and enthusiasts.

Earlier this week, the top US regulator announced its decision to postpone Ethereum ETF applications until January 1st, 2024, stating that it requires more time to deliberate on the proposal.

Even though many stakeholders were disappointed with the commission’s decision, it is not the first time the SEC has delayed decisions regarding the approval of spot crypto ETF products.

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Surging Whales Transactions

According to Lookonchain data, there has been a noticeable surge in whale selling and deposits on exchanges recently. The data revealed that these increased whale activities have caused nearly 43K ETH (valued at $82.9 million) to be available on exchanges.

A transaction on November 17th involved one person transferring 19.3K ETH (worth around $37.16 million) to Binance. The whale’s action has further contributed to the selling pressure on ETH.

These large ETH deposits on exchanges have amplified selling pressure, increased market volatility, and affected Ethereum’s trading volume. Consequently, Coingecko data reveals that ETH’s latest trading price is $1,940, reflecting a 1.49% decrease in the past 24 hours and a 5.8% decrease in the last seven days.

This ETH price drop emphasizes the impact of increased whale activity on the market’s direction.

Will Spot ETF Bolster Crypto Market’s Valuation?

Experts in the industry believe that spot ETFs in the crypto space could significantly impact the digital asset market. They explained that the enormous potential for trillions of dollars flowing into the crypto space from institutional and traditional investors would fuel a strong bullish run.

BlackRock’s involvement and Grayscale’s legal victory over the SEC in 2023 renewed hopes that the US regulator would approve a spot BTC ETF for the US crypto market. Some analysts predict that the approval will happen before June 2024.

According to market analysts and crypto enthusiasts, spot crypto ETF products would attract a considerable influx of institutional and traditional capital into the crypto market. Consequently, there would be a massive flow of funds from traditional investment avenues into the cryptocurrency market.

The reason for the optimism is the belief that a regulated spot ETF would inspire confidence among institutional investors and a well-regulated option to invest in digital assets. A side benefit of this approval is that it would ease concerns about custody, compliance, and regulatory uncertainties.

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Also, the perception that cryptocurrencies are easy to use and legitimate could increase broader adoption. Nevertheless, stakeholders expect regulatory decisions to positively impact the integration of cryptocurrencies into the global financial landscape.

Author: Owen Clark

Owen Clark, a seasoned crypto newsman and broker, deciphers the intricacies of the digital currency realm, empowering investors with his astute analysis and actionable insights.

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