The research firm noted that Grayscale ECE has more than $11 billion (AuM) in assets under management. This means that if the Ethereum ETF Grayscale faces outflows similar to those of the Bitcoin ETF Grayscale, $1 million could leave the fund in an average of 110 days, and this outflow of $6.5 billion in the first month of trading reached 23% of the fund's total value.
The #Grayscale #EarnFreeCrypto2024 Trust (GBTC) also performed similarly before converting to an #ETF . This is believed to have contributed to the ¥6.5 billion outflow recorded by the fund in its first month of trading, as many investors have locked in profits since purchasing the fund at a discounted price. Thus, Kaiko expects a similar situation to happen with ECE Grayscale.
It is known that outflows from the Grayscale Spot Bitcoin ETF fund are putting tremendous pressure on the bitcoin price, which has led to a significant drop in the flagship cryptocurrency. If the Grayscale Spot #EarnFreeCrypto2024 ETF suffers a similar fate, the same can be expected for the price of Ethereum.
However, in addition to the fact that investors profited from the Grayscale bitcoin ETF, the Grayscale fund's fees are believed to have been another factor in causing the significant outflows recorded at the time. 1 By comparison, grayscale's fees were the highest of any bitcoin ETF issuer. Thus, the likelihood of outflows from grayscale's etherium-ETF could be minimized if the asset manager makes fees competitive this time around.
Kaiko said that if other Ethereum spot Etf Ethereum start registering impressive inflows of funds, the price of Ethereum could still rise significantly, which could offset the outflow of funds from ECE Grayscale. A similar situation happened with bitcoin: Kayko said that by the end of Month 1, outflows from Grayscale GBTC were offset and exceeded by inflows from other bitcoin ETF funds.
Thanks to the impressive demand these ETFs recorded for bitcoin, the flagship cryptocurrency hit a new all-time high (ATH) on May 3 this year. Ethereum ETFs could also trigger a similar rally against the price of #ETH , depending on the inflows these funds record once trading begins.
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