Investors Withdraw ETH Holdings Despite Successful Ethereum Merge
Before the Ethereum merger event, some pundits and investors predicted a drop in the price of Ethereum, so trade cautiously. Popular analysts refer to merger hype as buy the rumors and sell the news scenarios.
The tightening of Fed reserves and other market factors have increased the volatility recorded in the valuations of ETH, BTC and other altcoins.
Following the merger event, analysts’ predictions proved correct as ETH price fell below support. As a result, some ETH investments were withdrawn and some additions were recorded after the merger.
according to Report, ETH investment decreased by $15.4 million, while BTC investment increased by $17.4 million. The data could hint at a withdrawal of investors from Ethereum to Bitcoin.
Contrary to the post-Ethereum merger hype, ETH prices plummeted. In early September, merger proponents believed that the combined ethereum would receive more investment. However, despite a smooth transition, the outflow numbers recorded last week appear to be the opposite.
Ethereum price falls
Tracking the price of ETH from pre-merger to today, the price of ETH fell from $1,800 to $1,300. Such a record can only imply that several investors who previously held ETH have sold the same asset. Such a price drop is crucial for Ethereum, as experts predict that if ETH falls below $1,250, the price will fall further to $1,000.
In the early morning of September 15, the exchange price of Binance ETH/BTC was 0.0817BTC. Hours later, the ETH value fell to 0.0746 BTC and continued to fall. Not only did the ETH price drop against BTC; the ETH/USD rate also dropped. While ETH holders are not happy with the price drop, most are looking forward to a recovery over time.
Matthew Sigel, head of digital asset research at VanEck, is one of the bullish investors. Sigel compared the combined ETH/USD performance to BTC’s performance after major changes. He thinks ETH will stabilize, but isn’t sure when.
Proof-of-Stake cryptocurrencies may be considered securities, says SEC
Last week, SEC Chairman Gary Gensler commented on pledged cryptocurrencies. The regulator said in the Wall Street Journal edition that the pledged cryptocurrencies could be subject to regulation. He further explained that pledged cryptocurrencies may be considered securities.
According to Gensler’s comments, the new Ethereum proof-of-stake token could be subject to regulatory uncertainty. Therefore, corporate investors may not want to get involved in ETH investing due to regulatory uncertainty.
According to The Wall Street Journal, Ethereum’s proof-of-stake has caught the attention of the U.S. Securities and Exchange Commission. He further pointed out that proof-of-stake coins have contractual properties and require SEC oversight. Gensler’s comments came hours after the ethereum merger was completed.
Although Gary did not specifically name Ethereum, his comments may have caused the price of ether to drop last week.
