Markets
Ethereum ETF Approval Sees Small Decline in Broader Market, $400 Million in Liquidations
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After the dust settled on the craze around the SEC Approval for Ethereum ETFs, the crypto market has recorded high levels of volatility. Data from CoinGecko shows that the top 20 digital assets (by market cap, excluding stablecoins) suffered losses of around 3% each.
Overall, Bitcoin (BTC) and Ethereum (ETH) saw drops of 3.4% and 3.5%, respectively. BTC is now playing at $67.3K, with Ethereum cruising the streets at $3.6K. At the time of writing, market-wide liquidations have generated outflows of around $400 million.
The market’s subdued performance resulted in more than 107,000 crypto traders suffering losses in excess of $400 million. According to Coinglass settlement dataLong-term ETH traders, who expected the ETF news to boost the digital asset’s price, bore the brunt of these losses, totaling around $107 million.
The largest single settlement was a $12.4 million long bet on Ethereum on the Binance exchange. Bitcoin traders also lost approximately $75 million during the same period.
Julio Moreno, head of research at CryptoQuant, noted that the market had already priced in the approval of the Ethereum spot ETF, evidenced by the narrowing of the discount between Grayscale’s ETHE and ETH in the days leading up to the decision.
https://twitter.com/jjcmoreno/status/1793706458393002203
This analysis suggests that the ETH ETF approval was a “news sell-off” event, with investors who anticipated the approval positioning themselves accordingly. Notably, last week, the price of ETH rose by around 21%, with the Ethereum futures market reaching a one-year high of 3.6 million ETH.
The weak market performance was also attributed to the delay in the launch of ETFs. Although the SEC has approved ETFs, they have not yet granted authorization for their launch, which requires an approved S-1 filing, although this is considered more of a formality. Bloomberg ETF Analyst James Seyffart explains that the S-1 approval process can take a few weeks or longer.
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