Is Ethereum Becoming Scarcer? Data Shows Rare BTC and ETH Divergence

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As an analyst with a background in cryptocurrency and market trends, I find the current dynamics between Ethereum (ETH) and Bitcoin (BTC) intriguing. The data shared by Leon Waidmann from BTC-Echo highlights a significant divergence in their exchange balances: Ethereum is being accumulated at a faster rate than Bitcoin.

As an analyst, I’ve noticed some intriguing shifts in Ethereum (ETH) metrics recently. Contrary to initial expectations, the digital currency appears to be experiencing scarcity at a faster pace than previously anticipated. This conclusion is supported by on-chain data indicating that Ethereum is currently being accumulated more rapidly than Bitcoin.

The Ethereum and Bitcoin Divergence

Based on the findings from Leon Waidmann at BTC-Echo, it appears that Ethereum is growing less common than Bitcoin when considering exchange balances. Although each cryptocurrency has distinct performance indicators, the interconnection between their balances on exchanges is equally significant.

HUGE divergence between #Ethereum and #Bitcoin!
ETH is becoming SCARCER than BTC.#ETH Exchange Balance: 10.189% #BTC Exchange Balance: 15.086%
The gap is WIDENING!
— Leon Waidmann | Onchain Insights (@LeonWaidmann) July 7, 2024

Based on the Glassnode information provided by Waidmann, the Ethereum balance held on exchanges amounts to 10.189%. This number is lower than Bitcoin’s exchange balance of 15.08%. The narrowing difference between these percentages implies a possible convergence in the future.

As a researcher studying the Ethereum market, I’ve observed an intriguing development: the surge in demand for Ethereum following the buzz around potential Ethereum Exchange-Traded Funds (ETFs). Investors have been scooping up Ethereum at an unprecedented rate, leading to a noticeable drain on trading platforms. This frenzy can be attributed to the anticipated influx of Wall Street capital once the Ethereum ETF hits the market.

As a crypto investor, I can confidently say that the current projection for Bitcoin’s price isn’t without merit based on the surge in demand for spot Bitcoin ETF products. When the Bitcoin ETF debuted in January, major players like Susquehanna International Group jumped at the opportunity to acquire the asset. Their massive purchases significantly contributed to pushing the Bitcoin price to an all-time high of $73,750.07.

Although the Ethereum exchange balance is rapidly decreasing, its effect on ETH‘s price remains unnoticed as of now. The current price for one Ethereum is $2,983.03, which represents a 2.31% decrease over the previous 24 hours. The coin’s lowest and highest trading prices during this period were $2,956.99 and $3,080.11 respectively.

Revival Plans for ETH

The anticipated development of Ethereum’s future expansion significantly depends on the upcoming decision from the US Securities and Exchange Commission (SEC) regarding the Ethereum-based SPOT ETF. Following their approval of the 19b-4 forms for the ETF application several weeks ago, the submission of an S-1 form is imminent.

The next two weeks are expected to be crucial in determining the launch timeline, which currently remains uncertain for the Ethereum ETF. According to Nate Geraci, President of The ETF Store, regulatory actions are anticipated to facilitate the ETF’s trading within this timeframe.

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2024-07-08 00:55