Ether Falls Amid $140 Billion Crypto Market Downturn

It’s an extension of a wider cryptocurrency rout that’s wiped out more than $140 billion in market value since the beginning of the week, Bloomberg News reported Thursday (Sept. 25).

Data compiled by the news outlet showed ether (ETH), the second most popular cryptocurrency, dropping by as much as 4.7% to $3,969 on Thursday, while market bitcoin, the most popular form of crypto, fell 1.7%.

Ether’s downturn came as “institutional inflows cooled” with “technical signals pointing to short-term pressure,” said Rachael Lucas, a crypto analyst at BTC Markets.

Investors withdrew close to $300 million from US-listed Ether exchange-traded funds (ETFs) since Monday, when $1.7 billion in bullish bets were erased in a sudden downturn that impacted most major tokens. Lucas told Bloomberg she expects more liquidations will follow if ether falls below $3,800.

PYMNTS spoke last month with Dave Merin, co-founder and CEO of The Ether Machine, after his company spent nearly $100 million acquiring more ETH, with plans to deploy a war chest that could surpass $1.5 billion.

“Everything we’re doing is built to be institutional grade from day one,” Merin said. “No legacy liabilities, no operating distractions — just exposure to the most important digital asset since bitcoin, but done in a way that’s dynamic, thoughtful, and structurally superior.”

As PYMNTS wrote in that report, longtime industry watchers might have seen this story play out before, only with different asset classes.

“When MicroStrategy’s Michael Saylor turned a publicly traded software company into a bitcoin holding vehicle in 2020, he helped ignite an institutional wave of BTC accumulation. Saylor issued debt, sold equity, and used the proceeds to buy bitcoin, leveraging the capital markets to amplify crypto exposure,” PYMNTS wrote.

The Ether Machine team contended that Ethereum could potentially be leveraged more actively than bitcoin when managed in a publicly traded treasury structure, leading to a broad range of financial opportunities through the generation of ETH-denominated yield.

The advent of crypto ETFs in the wake of the SEC’s long-anticipated approval of spot bitcoin ETFs has fostered an assumption that similar products are inevitable for Ethereum. Merin, however, said he sees the ETF model as ill-suited for ETH, especially because of the asset’s unique technical and economic mechanics.

“Most ETFs can’t stake more than 50% of their ETH,” he said. “And in a crisis, that number might need to be even lower. That risk isn’t insurable — it’s structural.”