The amount of Ethereum (ETH) held on centralized exchanges is quickly decreasing since the United States Securities and Exchange Commission (SEC) approved spot Ether ETF products.

Decreasing Ethereum Availability

Centralized trading platforms are the main way most traders buy cryptocurrencies like Ethereum. According to top market analyst Ali Martinez, the supply of Ethereum on these platforms is shrinking. Martinez recently shared on X that about 777,000 ETH, worth around $3 billion, have been pulled out of crypto exchanges since the spot Ethereum ETF products got the green light in the US. Although these ETFs haven't started trading yet, this trend could significantly impact ETH's price in the long term.

In a tweet, Martinez highlighted that the current Ethereum balance on exchanges is the lowest since at least December 11, 2023. With the high rate of institutional investment in Bitcoin through its spot ETF products, Ethereum might face a supply shortage soon.

Potential Price Impact

If the spot Ethereum ETF sees a similar accumulation to Bitcoin, it could quickly drive Ethereum's price higher. Bitcoin's price soared to a new all-time high (ATH) above $73,000 in March, driven by corporate investment. Many analysts believe that for ETH to surpass its previous ATH of $4,891.70, the full launch of the spot Ethereum ETF is crucial. Standard Chartered predicts that in the best-case scenario, Ethereum's price could reach $8,000 by the end of this year.

Other Growth Factors for ETH

Beyond the spot ETF, Ethereum has other strong fundamentals that can boost its price over time. The digital currency is deflationary, as small amounts of ETH are burnt and removed from circulation through transaction fees. Additionally, Ethereum's blockchain is continuously innovating with various upgrades to improve its Layer-2 protocols. These factors combined could help Ethereum break out of its current price stagnation and trigger a significant rally in the future.

In conclusion, the rapid decrease in Ethereum's availability on centralized exchanges, driven by the approval of spot Ether ETF products, could have a profound impact on ETH's price. Along with other strong fundamentals, Ethereum is poised for potential growth, with many analysts optimistic about its future.