Ethereum sinks below 1900 as ETF crash and SEC crackdown hit investors

- Ethereum Falls Below $1,900, Hits 2023's Lowest Price - Ethereum ETF Drops More Than 45%, Institutional Investor Funds Outflow [Unblock Media] The price of Ethereum has fallen below $1,900, hitting its lowest level since November 2023. Additionally, the price of Ethereum ETFs has formed a new low, dropping more than 45% since its initial sale on Wall Street in July 2024. This decline is being analyzed as a result of a complex interplay of structural factors and external variables, rather than simple market volatility. Firstly, the Ethereum network is still plagued by high gas fees and scalability issues. In contrast, the growth of blockchain platforms like Solana and Polygon, which offer low-cost and high-speed transactions, is standing out, causing investors to diversify their interests. This competitive environment is a major factor in the decline of Ethereum's price. Secondly, a recent massive hacking incident at the global cryptocurrency exchange Bybit resulted in approximately $1.4 billion worth of Ethereum being stolen. This has caused significant anxiety among investors, leading to widespread sell-offs. The decline in market trust due to the hacking has accelerated the drop in price. Thirdly, the regulatory moves by the U.S. Securities and Exchange Commission (SEC) regarding staking services have also impacted Ethereum's price decline. Institutional investors are adopting a conservative approach due to concerns about Ethereum potentially being classified as a security, which has led to reduced liquidity in the market. Not only Ethereum but Bitcoin has also fallen by 7% over the past 7 days, trading at around $88,700, while Ethereum has decreased by 11%, settling at $1,920. This simultaneous decline suggests a contraction in overall liquidity within the cryptocurrency market. Although Ethereum ETFs surged more than 20% following approval, the recent price decline indicates that expectations for institutional capital inflows have weakened. The combination of potential additional SEC regulations and the conservative investment stance of institutions has drastically reduced ETF yields. On March 13, 2025, Ethereum plans to apply the 'Dencun' upgrade to its mainnet. This upgrade aims to improve scalability and fee structure, which could enhance network performance. However, the actual impact of this upgrade on market sentiment remains to be seen. Currently, the SEC is reviewing an ETF application that allows Ethereum staking. If approved, it could trigger an increase in institutional capital inflow, potentially leading to a price rebound. However, if regulations are tightened, the market may contract even further. Unexpected events like large-scale hacking incidents and a slump in the memecoin market contribute to increased market volatility. The recent price decline of Ethereum is attributed to a combination of network issues, large sell-offs, and regulatory uncertainty. Particularly, the sluggishness in the ETF market and reduced liquidity are additional burdens. However, the upcoming Dencun upgrade and the SEC's decision on the ETF application could become significant turning points.