Breaking Crypto News – How Spot Ethereum ETFs Will Lead to ETH Supply Crunch?
Breaking Crypto News – According to cryptocurrency accounting software company Integral, the June 3 launch of the spot Ethereum ETF might cause a supply crunch. Predictive analysis of spot Bitcoin ETFs before their launch earlier this year reflects the attitude around those products.
Integral believes that ETF issuers would purchase and hoard substantial amounts of ETH, taking it out of the open markets and raising the price of the cryptocurrency. There’s a chance the trend has already started. Oliver Isaacs, a crypto entrepreneur, was quoted by Integral as saying that since the SEC authorized spot ETH authorization on May 23, over $3 billion of ETH has left exchanges, bringing ETH exchange reserves to a six-year low.
Institutional Use of ETH Could Increase if Ether ETFs Approved
About 25% of the ETH supply is currently staked, according to Integral, who also predicted that distinct staking practices will exacerbate the supply shortage. The company states that while staking participants will profit from increased prices, ETF issuers will not directly engage in staking.
Integral also thinks these approvals will confirm cryptocurrency as a respectable asset class and boost institutional use of ETH. Not only that, but approvals might lead to an “altcoin season” as demand for ETH spreads to other cryptocurrencies.
FAQ
When Will Spot Ether ETF Approval Happen?
Approval is expected in the coming weeks or months.
How Legitimate is Cryptocurrency?
Although they are not always fraudulent, scammers may target digital assets due to their complexity and potential for financial gain. There are cryptocurrency variations of well-known frauds like pump-and-dump operations, Ponzi schemes, and phishing attacks.
What is a Supply Crunch?
When the market’s supply of essential components, raw materials, and finally completed goods declines at a time when demand is increasing, it is referred to as a supply crunch. Product shortages, cost increases, and an increase in the cost-push inflationary pressure on an economy are all caused by these supply chain issues.
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