The recent decline in Ether’s price is primarily due to waning investor interest rather than the ongoing outflows from spot Ether exchange-traded funds (ETFs), according to a report by Nansen, an on-chain analytics platform.

Since the launch of U.S.-based spot Ether ETFs on July 23, the price of Ether has dropped by over 26%. These ETFs have seen a cumulative net outflow of $420.5 million. However, Aurelie Barthere, a principal research analyst at Nansen, suggests that the sluggish price action is not directly tied to these outflows. Barthere explained,

"BTC has been down by 14% since July 23. My reading is tiredness in risk appetite, non-related to the ETF launch."

Initially, many expected Ether’s price to surge following the launch of these ETFs, similar to how Bitcoin saw significant investment inflows, which helped push its price past the $50,000 mark earlier in the year.

As of 12:14 pm UTC on August 19, Ether’s price had fallen to $2,587, down from $3,500 at the time of the ETF launch.

The broader cryptocurrency market has also been affected by a significant sell-off, which erased most of the gains made by the 50 largest cryptocurrencies in 2024. Barthere pointed out that this sell-off was largely driven by the traditional equities market rather than being crypto-specific. She also added,

"We know that the first sell-off in March led to realized losses, especially among traders engaged in many crypto narratives. Then a second sell-off, in correlation with equities, occurred in July to August. This is in the context of still solid but slowing US growth and stretched valuations in traditional risk assets like US equities."

Several factors contributed to the crypto market’s downturn, including the Bank of Japan's decision to raise interest rates from 0% to 0.25% on August 5. Additionally, five major market makers sold a total of 130,000 Ether, worth $290 million at current prices, since August 3, contributing to Ether’s price drop from $3,000 to below $2,200.

Looking ahead, it remains uncertain whether the subdued prices indicate a temporary correction or the end of the current bull market. Barthere noted that the future of the crypto market will depend heavily on the U.S. Federal Reserve’s upcoming monetary policy decisions. She stated,

“To me, it is still unclear if we are just taking a consolidation pause or if crypto prices have peaked. If the Fed can cut while growth holds, the bull market in crypto and equities will likely continue. If we get any sharper deceleration in growth, there will be less upside for risk assets."

Some experts, however, believe that the crypto bull market could continue until the third quarter of 2025, with firms like Bybit and BlockScholes predicting an extended bull run for Bitcoin.