Ether prices have dipped below $4,000, marking their lowest point in nearly seven weeks.
This decline is part of a larger downturn in the cryptocurrency market, which has seen over $140 billion in market value erased since the week began, as reported by Bloomberg News on September 25th.
According to the same report, Ether (ETH), the second-largest cryptocurrency, dropped about 4.7% to $3,969 on Thursday, with Bitcoin, the leading digital currency, experiencing a 1.7% decline as well.
The drop in Ether seems to be linked to a slowdown in market activity, according to Rachel Lucas, a crypto analyst at BTC Market.
Investors have pulled nearly $300 million from U.S.-listed Ether exchange-traded funds (ETFs), leading to a swift liquidation of bullish positions worth around $1.7 billion, impacting many significant tokens. Lucas expressed that if Ether falls below $3,800, further liquidation could be expected.
In a conversation last month, Dave Mellin, co-founder and CEO of Ether Machine, mentioned plans to roll out significant capital exceeding $1.5 billion after investing nearly $100 million to acquire more ETH.
“Everything we do is designed for institutional performance from the start,” Mellin said. “There’s no legacy debt or any manipulative distractions. It’s directly tied to essential digital assets since Bitcoin, but we approach it in a dynamic and well-structured manner.”
In an earlier report by Pymnts, seasoned industry observers may recognize a similar pattern in other asset classes.
For instance, when Michael Saylor transformed Micro Strategy into a Bitcoin-acquiring entity in 2020, it sparked an institutional trend in BTC accumulation. Saylor utilized debt, sold shares, and used revenue to buy Bitcoin, which amplified exposure through capital markets.
The Ether Machine team suggests that Ethereum, when managed through publicly traded financial structures, could potentially be leveraged more aggressively compared to Bitcoin, creating diverse financial opportunities through yield generation.
The rise of crypto ETFs, especially after the SEC’s long-awaited approval of Spot Bitcoin ETFs, has led to the assumption that similar products for Ethereum are bound to happen. However, Mellin views the ETF model as inadequate for ETH, particularly because of the distinct technical and economic features of the asset.
“Most ETFs can’t leverage more than 50% of their ETH,” he pointed out. “In a crisis, that number might need to drop even further. The risk isn’t insurable; it’s structural.”
