Institutional Flows Impact Ethereum Price Amid Crypto Liquidations: What’s Next?

Ethereum (ETH) has experienced a significant drop in price following recent crypto liquidations this week, with institutional funds playing a crucial role in the asset’s wider acceptance. The approval of spot Bitcoin (BTC) ETFs by the United States Securities and Exchange Commission (SEC) earlier this year saw traditional investors entering the market, giving the asset more legitimacy and pushing its price to an all-time high above $72,000.

The surge in spot ETFs rallied the market and turned institutional investors’ attention towards Ethereum, the largest smart contract network. The clamor for a spot in Ethereum ETF gained momentum this year, with investors seeing the staking feature and on-chain decentralized finance activities as bullish drivers for the asset’s price.

However, despite the anticipation of spot ETFs for Ethereum, the asset has seen a decline in institutional flows in recent weeks. A report from CoinShares revealed a $22 million outflow from Ethereum last week, bringing total monthly exits to $51.3 million. Year-to-date flows stand at $23 million, indicating a slower growth in assets under management compared to Bitcoin last year.

The price of Ethereum currently stands at $3,052, reflecting a 13% drop this week and a 15% drop this month. Despite the downturn, bulls remain optimistic about a potential price recovery, especially if a spot Ethereum ETF receives approval in the United States. A general market uptrend could also boost institutional inflows in Ethereum, particularly in decentralized finance activities.

As the market continues to evolve, the role of institutional investors in shaping the future of Ethereum remains crucial. Stay tuned for more updates on the cryptocurrency market and the potential recovery of Ethereum’s price.