Ethereum Spot ETFs Will Legitimize Cryptocurrencies and Cause ETH Supply Shortages – Integral

The launch of the ethereum spot ETF could result in a supply shortage upon launch, according to crypto accounting software firm Integral. ethereum-etfs-approved”>3 of June.

The projection reflects sentiment around spot bitcoin ETFs ahead of their launch earlier this year. Since then, ETFs connected to the flagship cryptocurrency have seen record inflows, and btc supply on centralized exchanges fell noticeably in parallel.

ethereum supply crisis

Integral anticipates that ETF issuers will purchase and hold large amounts of eth, thereby removing a portion of eth from open markets and driving up the price of the crypto.

You could say that the trend is already underway. Integral cited crypto entrepreneur Oliver Isaacs, who twitter.com/integral_xyz_/status/1797726183867678741″>revealed that More than $3 billion of eth had left exchanges since the SEC approved eth spot approvals on May 23, putting eth exchange reserves at their lowest level in six years.

Integral said that the split staking trends will intensify the supply crisis and noted that currently around 25% of the eth supply is in staking. According to the company, ETF issuers will not participate in betting directly, but betting participants will benefit from the price increase.

Furthermore, Integral believes that the approvals will increase institutional adoption of eth and validate cryptocurrencies as a legitimate asset class. Additionally, he said the approvals could trigger an “altcoin season” as demand for eth spreads to other cryptocurrencies.

Spot eth ETFs are expected to launch in the coming weeks or months.

IBIT represents 25% of BlackRock's flows

Many are waiting to see if ethereum will follow the trend set by bitcoin after ETFs connected to the flagship cryptocurrency began trading in January.

Newborn Nine's bitcoin Spot ETFs have cemented bitcoin as a viable investment option in the traditional financial industry, as evidenced by its astonishing and continued growth. BlackRock and Fidelity's IBIT and FBTC stand out in particular, following a record streak of capital inflows in the history of ETFs.

The two funds now represent a significant portion of overall ETF flows for both asset managers.

Bloomberg ETF analyst Eric Balchunas said BlackRock's IBIT represented x.com/EricBalchunas/status/1797644643712262482″>26% of the company's $65 billion ETF inflows since the beginning of the year. Notably, BlackRock is the largest issuer of ETFs in the US, with 429 exchange-traded funds under its belt.

IBIT has recorded total inflows of $16.7 billion since its launch.

Meanwhile, Fidelity's competing FBTC fund accounts for 56% of its total ETF flows of $15.8 billion this year. The FBTC has received $8.9 billion in total inflows to date.

Fidelity has launched and manages 70 ETFs.

Balchunas data indicates that BlackRock and Fidelity are the second and fifth largest ETF issuers based on year-to-date flows. The two companies rank first and second when considering only companies that have launched a spot bitcoin ETF.

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