Ether Experiences Major Price Drop Amid Trade War Concerns
Ether, the second-largest cryptocurrency by market capitalization, faced a significant decline on Monday as fears of a potential U.S.-led trade war cast a shadow over risk assets. However, data reveals that investors were quick to seize the opportunity, purchasing ether at lower prices following the dip.
According to analytics firm IntoTheBlock, nearly $1 billion worth of ether was withdrawn from centralized exchanges on Monday, marking the highest single-day net outflow since January 2024. This surge in outflows suggests that traders capitalized on the price drop to accumulate more ETH, as noted by IntoTheBlock in a recent Telegram broadcast.
The price of ether plummeted to around $2,000 on various exchanges as market liquidity tightened and traders rushed to offload futures contracts. Although the price later recovered to approximately $2,800, the overall sentiment in the market remains bearish. Data from UltraSound.Money indicates that the deflationary effects of the Merge are beginning to unwind, adding to the cautious outlook.
Record Trading Volume for Ether ETFs
In the midst of this volatility, ether exchange-traded funds (ETFs) witnessed an unprecedented trading volume on Monday. This surge coincided with a turbulent day in the markets after President Donald Trump announced and subsequently paused tariffs on Canada and Mexico.
Traders exchanged around $1.5 billion worth of shares across nine different ETFs, according to data from Bloomberg. Notably, BlackRock’s iShares Ethereum Trust (ETHA) captured half of that trading volume. Despite this activity, overall inflows remained within typical ranges. Reports from Farside Investors indicate that the ETFs attracted $83.6 million in net inflows on Monday, with a significant portion directed towards Fidelity’s Ethereum Fund (FETH). Interestingly, ETHA, the largest fund among the group, did not see any net inflows on that day.
As the U.S. trading day drew to a close, Eric Trump, the son of President Donald Trump, took to social media platform X to encourage his followers to invest in ether, suggesting it was an opportune moment to buy. His tweet contributed to the already heightened volatility, causing ETH’s price to spike to nearly $2,900. At the time of writing, ETH was trading at around $2,780, reflecting a 3.5% increase from the previous 24 hours.
