Key Insights:
Ethereum ETFs saw an outflow of $165 million despite bullish markets.
As a result, Ethereum risks falling below $3000.
However, Ethereum whales still maintain their rate of buying.
Experts estimate ETH could reach a fair value of $10,000 by 2025.
In the last five days, Ethereum ETFs have sold $165 million worth of ETH, signalling that these assets might not be preferred in the markets over direct ETH buying.
ETH ETF Outflows Since 15 Nov 2024
Coinglass
This selling seems a bit odd because cryptocurrencies and crypto-derived products like ETFs tend to perform well during bull markets. This has been seen in Bitcoin ETFs, which have seen more than $1 billion in inflows on two occasions this month. However, the same has not happened for Ethereum ETFs.
A reason for this could be that Ethereum is a much more complex crypto project than Bitcoin, with a lot more features like smart contracts, defi, and app functionality. Hence, those who are buying ETH seem to be much more technologically sound than the average Bitcoin buyer. This makes them prefer self-custody through non-custodial wallets, rather than going for the ETF route to invest.
Though generally, ETH ETF outflows result in a correction or crash in ETH's price, this time, certain large buyers (whales) have been accumulating Ethereum for the last two weeks.
Ethereum whales have continued to purchase despite the high selling rate from ETFs. Retail customers drive ETF sales and outflows, whereas whales make decisions independently as they deploy their capital.
Data from Ali Martinez shows that whales have bought approximately $1.4 billion worth of ETH in the last two weeks. This high accumulation was also reflected on IntoTheBlock's on-chain whale tracker.
The same data taken from a macro perspective from IntoTheBlock shows that Ethereum whales have been accumulating it for a while now. Whale transactions now exceed 10,000, the highest since August 2024, when Ethereum ETFs saw their first decent performance since launch.
The high rate of accumulation has not triggered a rally in the last fortnight because of Etheruem's selling from ETFs, primarily from Grayscale ETH ETF. Once this selling ends or slows down, we might see ETH first rally to $4,000 levels. Once they are conquered, we could see ETH rally towards $6,000 and eventually $10,000 by the end of next year.
Whales have been buying Ethereum because, at current levels, its price is estimated to be grossly undervalued.
Several experts have agreed that Ethereum's fair price should be around $10,000. Bankless co-founder Ryan Sean Adams is the most prominent. Adams thinks that ETH could be valued fairly around the $10k tag because it is a Triple-Point Asset.
Another known crypto analyst, Ali Martinez, predicts a similar rally in Ethereum. According to Ali, Ethereum could outperform Bitcoin in the short run and touch targets of $6000.
The value of Ethereum is irreplaceable in crypto markets. It supports 47 blockchains directly via its Layer-1 chain, several other independent Layer-1 chains via the EVM, thousands of Dapps, and hundreds of DeFi protocols. Certainly, all of them cannot stop functioning or start functioning independently. All of this makes Ethereum the central project in the crypto markets.
Obviously, this dependence comes with its own perks and risks. As a perk, Etheruem has one of the highest revenues in the crypto markets. For risk, we have the current situation where ETH is going through a transition phase, and this seems to drag the price.
By the end of 2025, ETH will have completed most of the upgrades, such as Pectra, Verkle Trees, and other small and large non-grouped upgrades. Then, we will see Ethereum in its full bullish mode.
To reap those benefits, we must keep our trust in Ethereum now.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.