Withdrawals of $3 billion worth of ETH from exchanges could indicate a potential shortage of supply for Ethereum.

In the United States, spot Ethereum (ETH) exchange-traded funds (ETFs) were approved on May 23 and since then, around $3 billion worth of Ether has been taken out of centralized crypto exchanges. This could potentially lead to a lack of supply in the future. According to CryptoQuant, from May 23 to June 2, approximately 797,000 Ether, with a value of $3.02 billion, were transferred away from exchanges.

The decrease in exchange reserves indicates that investors are moving their Ether to self-custody options, indicating a preference for holding rather than selling immediately. When there are fewer coins on exchanges, it usually means less supply available for selling, which can result in limited supply. Confirming this pattern, Glassnode data reveals that the proportion of circulating Ether on exchanges has reached its lowest point in years, currently sitting at only 10.6%.

The approval of Ether ETFs has sparked considerable interest, with Bloomberg ETF analyst Eric Balchunas suggesting that these ETFs could realistically launch by late June. Some market analysts predict that the introduction of spot Ethereum ETFs could propel Ether to surpass its all-time high of $4,870, set in November 2021.

Although there are concerns, the potential effects of Grayscale’s Ethereum Trust (ETHE) are still being deliberated. The trust manages $11 billion worth of assets and its performance may parallel that of the Grayscale Bitcoin Trust (GBTC), which experienced $6.5 billion in outflows after its approval. This could greatly affect the price movement of ETH.