Geopolitical risks swirling in the Middle East are the latest headwinds to hit Ethereum-based funds as a series of outflows continues at a rapid pace.
According to one source, investors have withdrawn $118 million from digital asset investment products tracking Ethereum in the past five weeks. report From CoinShares on Monday. Meanwhile, Bitcoin-based funds received more than $3.5 billion in inflows.
“Investors appear to be hesitant as positive price momentum stalls,” CoinShares’ James Butterfill said in a report, adding that Ethereum has “taken a hit.” Ta. [the most] on a relative basis” amid last week’s decline.
The second largest virtual currency by market capitalization is down 14% to $3,100 Over the past seven days, as fears have come true, Iranian drone attack on Israelaccording to CoinGecko. As hopes for the U.S. Spot Ethereum ETF continue to dwindle, with a reported looming regulatory investigation, there are concerns of broader conflict in the region.
However, a new group of crypto investors will soon join the fray. Last week, Hong Kong's securities regulator Approved with conditions Find Ethereum and Bitcoin ETFs in this region. An influx might help, but bloombergEric Balciunas of
“Add other countries […] “ETFs are definitely additive, but they don't make a dime compared to the strong US market,” he said. Said Twitter (also known as X) estimates that the Hong Kong-based cryptocurrency fund is attracting a total of $500 million between Bitcoin and Ethereum. “Don't expect much flow.”
In the U.S., the likelihood of a spot Ethereum ETF emerging in the short term has never been slimmer. As the May deadline for the Securities and Exchange Commission (SEC) to respond to Spot Ethereum ETF applications rapidly approaches, the odds of approval are increasing. plummeted Cryptocurrency-based prediction site says it rose to 18% on Monday from 76% in January Polymarket.
Analysts have cited a lack of meaningful communication between asset managers and the SEC ahead of key deadlines. Adding to the pressure, the Ethereum Foundation announced last month that “national power” was researching Swiss non-profit organizations that help support the Ethereum ecosystem. luck The SEC is reportedly asking crypto companies for details about their interactions with the Ethereum Foundation.
Outflows from Ethereum-based funds continue as investors allocate millions of dollars to altcoins such as Solana and Litecoin. report CoinShares announced last week. Recently, Ethereum Denkun The upgrades have significantly reduced Layer 2 network charges and greatly improved the network user experience, but 3iQ's Mark Connors believes the effects have been drowned out by the ETF news.
“Everyday prices are driven by momentum, and that momentum is leaving Ethereum,” he said. Decryption. “While there is a lot of good news regarding Ethereum traffic, fees, and utility, 2024 has been all about ETFs.”
Edited by Andrew Hayward
The views and opinions expressed by the authors are for informational purposes only and do not constitute financial, investment, or other advice.
