The U.S. Securities and Exchange Commission (SEC) approving Ethereum exchange-traded funds (ETFs) has led to indications of an upward trend for ETH investors. On-chain data suggests an increasing trend of self-custody of ETH, with withdrawals from cryptocurrency exchanges. Experts consider this to be a bullish signal for the price of ETH.
ETH Outflows from Cryptocurrency Exchanges
On-chain data provided by Santiment shows that the amount of ETH currently held on cryptocurrency exchanges is at its lowest level in the past five years. This is attributed to the increasing trend of investors self-custodying their ETH since mid-August 2023. Santiment reported that ETH outflows from cryptocurrency exchanges reached an all-time high on October 4:
Ethereum saw approximately 110,000 ETH (181 million dollars) being withdrawn from exchanges on October 4, which was the largest outflow day since August 21, 2023. The amount of Ethereum outside of cryptocurrency exchanges is currently at an all-time high with 115.88 million ETH.
Historically, increased outflows from cryptocurrency exchanges have been a bullish signal for a coin or token, indicating potential future price sensitivity. In addition to on-chain data on investor movements, broader regulatory coverage is also favorable for a potential ETH price rally.
Ethereum Futures ETFs
On October 2, 2023, various Ethereum futures ETFs were launched and made available for trading, including BitWise, ProShares, and VanEck. This triggered a sudden price surge for ETH and increased hopes of an impending bull market for the largest altcoin.
However, the hopes for SEC approval of a spot Bitcoin ETF by the end of the year have diminished due to the recent deferral decisions by the U.S. federal regulator, affecting various asset management giants such as BlackRock and Valkyrie.
Furthermore, optimism remains high due to the court ruling in the case filed by Grayscale against the SEC. The company recently applied to the SEC for the conversion of Ethereum Trust (ETHE) into a spot Ethereum ETF.
