Ethereum (ETH) Price May Drop in the Next '3-6 Months,” By This Time Next Year It Will 'Likely Be Higher” – Analyst

Ethereum's price may decline after the initial excitement surrounding spot Ethereum exchange-traded funds (ETF) fades, especially if its supply continues to grow at the current rate, according to an analyst.

Cryptocurrency analyst Benjamin Cowen has warned that Ethereum's price could decline in the coming months due to increasing supply and the potential fading of excitement surrounding spot Ethereum exchange-traded funds (ETFs).

In a recent X post on July 19, Cowen pointed out that Ethereum's supply has been increasing at a rate of approximately 60,000 ETH per month since April. If this trend continues, Cowen noted that Ethereum's supply will return to the levels seen at the time of The Merge by December.

"If the supply of ETH keeps increasing by ~60k/month like it has been since April, then by Dec the supply will be back to what it was at the merge," stated the crypto trader and founder of Into The Cryptoverse.

Post-Merge, Ethereum transitioned to a deflationary state, reducing its supply by about 455,000 ETH by April 2024. However, since then, the supply has increased by about 150,000 ETH.

According to Cowen, if the current trend continues, Ethereum's supply will increase to the levels seen before The Merge.

"If the supply of ETH keeps increasing at 60,000 ETH per month, then we will see the supply revert to what it was back at the merge," reiterated Cowen.

He also added, "If it follows 2016, then ETH/BTC final capitulation will not start until September 2024, which would be enough time for the novelty of the spot ETF relative to BTC to potentially wear off."

Cowen predicts that Ether's price might drop within the next "3-6 months," despite his belief that in 1.5 years, the price will "likely be higher" than its current value.

At the time of publication, Ether is trading at $3,507, according to CoinMarketCap.

Onchain analyst Leon Waidmann recently highlighted a "supply crisis" for Ethereum, noting that exchange balances have dropped to 10.2% while 39.3% of ETH is locked in smart contracts.

“Most investors don’t realize how tight the ETH supply side is,” stated Waidmann in a July 16 X post.

Meanwhile, the Chicago Board Options Exchange (CBOE) announced on July 19 that five spot Ethereum ETFs will start trading on July 23, subject to regulatory approval.

These include the 21Shares Core Ethereum ETF, Fidelity Ethereum Fund, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and Franklin Ethereum ETF.

On May 23, the United States Securities and Exchange Commission (SEC) approved rule changes to allow the listing of several spot Ether ETFs.

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