Summary
- Ethereum (ETH) has experienced an 8.2% decline in price between Oct. 2 and Oct. 9.
- Possible factors contributing to the price decrease are increased coin issuance, sales by Vitalik Buterin, and a disappointing performance of the futures-based exchange-traded fund (ETF).
Factors Contributing to the Price Decrease
1. Ether supply increase shatters the “ultrasound” theory
- The Ethereum network underwent upgrades in 2022, resulting in changes to its coin issuance mechanism.
- The new supply schedule, known as “ultrasound money,” aimed to decrease the total supply of ETH.
- In September 2023, the coin issuance equation experienced an inversion, leading to an increase in the supply of ETH.
- High fees and network congestion partially contributed to the decreased demand in transactions.
2. Vitalik and the Ethereum Foundation’s sale are bad optics
- Data reveals that Vitalik Buterin has sold a significant amount of ETH in recent weeks.
- The Ethereum Foundation has also made a sale, aligning with its regular requirements.
- Speculation arises regarding the reasons behind the sales.
3. Dwindling demand for the ETH futures ETF
- A crypto wallet address linked to the FTX exploiter has converted a significant amount of ETH into tBTC.
- Converting ETH into a wrapped version of Bitcoin suggests anticipating higher returns.
- Ether’s price trend against Bitcoin has been unfavorable in recent months.
- The launch of Ethereum futures-based Ether ETFs on CME and CBOE had a weak start.
Conclusion
The recent decrease in Ethereum’s price is influenced by various factors, including increased coin issuance, sales by Vitalik Buterin and the Ethereum Foundation, and weaker-than-expected demand for the futures-based ETF.
Please note that this article is for informational purposes only and does not provide investment advice. Readers should conduct their own research before making any investment decisions.
