Ethereum price has dropped for two consecutive days, erasing most gains in the last three weeks. The price of Ethereum (ETH) retreated to $3,145 on Thursday, its lowest level since July 13 and 11% below its highest point this week.
The recent decline follows the Securities and Exchange Commission’s approval of spot Ethereum ETFs. Despite the strong performance of these ETFs—trading about $852 million compared to Bitcoin’s $1.1 billion—the price fell.
Data by BlackRock shows that ETHA has over $269 million in assets, while the Bitwise Ethereum ETF (ETHW) has $230 million in assets.
Ethereum has dropped for three key reasons, according to Michael van de Poppe, a popular crypto analyst. One reason is the ongoing liquidations from the Grayscale Ethereum Trust (ETHE), which has a high expense ratio of 2.50%.
Many investors have sold their ETHE holdings, opting for cheaper funds. An investor with $100,000 in ETHE assets pays a $2,500 fee, while in Grayscale’s Mini Ethereum ETF (ETH), they’d pay just $150.
Michael anticipates that once the outflows from ETHE ease, Ethereum’s price could hit a record high. He expects a slight sell-off followed by a significant surge.
Ethereum price is also falling as investors "sell the news" after the token rallied ahead of the approval. This phenomenon has been seen with Bitcoin halving and the Ripple vs. SEC case.
The decline aligns with the ongoing drop in Bitcoin (BTC), the largest cryptocurrency, which has fallen for four straight days. This triggered a sell-off among other altcoins like Avalanche (AVAX) and Jasmy.
Despite the decline, a bullish case remains for Ethereum. Jay Jacobs of BlackRock underscores Ethereum’s strong utility and its position as the second-largest cryptocurrency.
Ethereum remains the most active blockchain, handling the most stablecoin transactions and generating significant fees. Data by TokenTerminal shows it has made over $1.7 billion in fees this year, double that of Tron (TRX) and Bitcoin combined.
