Reasons Record Ethereum Inflow to Exchanges

Although Ethereum has been one of the best-performing crypto coins for a long time, its price has fallen significantly in the last two weeks. According to data from blockchain tracker IntoTheBlock, this is due to an increase in fear, uncertainty and doubt (FUD) surrounding Ethereum’s potential status as a security. But what exactly are the reasons for this?

Rise of eth to stock exchanges

A striking consequence of this is the record inflow of eth to centralized exchanges. In the past week, holders transferred as much as $720 million in ETH to these exchanges. This is the largest weekly inflow since September 2022. At the same time, the total amount of ETH held in wallets for more than a year has continued to rise despite the negative news.

Furthermore, there has been a decrease in the transaction costs of eth. After the hype surrounding meme coins subsided, the total transaction costs for eth have fallen by 41%. Moreover, we saw that Solana in particular managed to benefit from the meme coin hype.

According to data from IntoTheBlock, eth has lagged Bitcoin in the recent market rally, with the ETH/BTC ratio hovering just above 0.05, close to its lowest point since June 2022. While Bitcoin has surpassed its 2021 high, the increase of Ethereum remained 32% below its all-time high.

In this week’s newsletter, we analyze some of the recent FUD against Ethereum. We evaluate ETH’s relative performance in terms of price, its fundamental metrics and the bullish outlook shared by ETH’s long-term investors👇https://t.co/LOJscBi0dF

— IntoTheBlock (@intotheblock) March 23, 2024

Legal uncertainties surrounding Ethereum Foundation

Additionally, there are rumors about the legal status of eth and reports that the Ethereum Foundation is under investigation by law enforcement. These rumors, along with ongoing concerns about Ethereum’s security status, have fueled the recent influx of ETH onto exchanges.

If Ethereum were to be classified as a security in the US, it could jeopardize the prospects for an Ethereum ETF to be approved. This is a concern raised by US congressmen and Coinbase’s top lawyer, who have criticized the SEC for failing to protect Ethereum from regulatory scrutiny.