Regarding the expectations for ETH ETF, our views are briefly summarized as follows:

According to most measurable data points, the BTC ETF
It has been a huge success. To date, we have seen about $15 billion in net inflows involving about 260,000 BTC. The trading volume of these ETFs is also very impressive, with 11
Since the ETF product started trading in early January this year, the cumulative trading volume has reached 3,000
Now, the second-largest crypto asset is having its moment. We don’t predict capital flows, but here’s our take on how it will impact the ecosystem more broadly.

In this post, we’ll cover:

Grayscale’s concerns about premium burden

Different listing conditions than BTC

Demand Agent

Impact on DeFi

Grayscale’s concerns about premium burden

This has been noted by others before, and for good reason. We think it will be interesting to see
There are several reasons why the ETH ETF will be a seller when it is launched. When observing the discount rate of ETHE relative to the net asset value (NAV) until its final approval and conversion, ETHE
The trading price has been as low as -56%. In addition, if we continue to convert ETHE to GBTC
We will likely see management fees translate into higher expense ratios than our closest competitors if we follow a similar pattern. Currently, ETHE has a 2.5% management fee, while Van Eck and
Franklin Templeton costs about $20
Basis points. We expect other issuers’ fees to be around these levels as well. If sellers are purely motivated by achieving lower management fees, it will likely just offset the net inflows into different products. In summary, the two main types of sellers we expect are:

Sell ​​due to high fees relative to other issuers

Selling in order to realize a profit from purchasing a product at a discount

Despite the heavy selling from Grayscale, we still see net inflows into the ETF overall, both in USD and BTC.

Different listing conditions from BTC

Bitcoin
The ETF may be the most anticipated ETF listing of all time, perhaps ever. But despite the gossip and discussion from Bloomberg analysts, it all comes down to Grayscale’s decision to take down the SEC.
The breakthrough was announced on August 29, and GBTC subsequently rose 30% and began to slowly return to its true net asset value.
Cointelegraph intern, the SEC’s Twitter account was hacked and other reasons for publishing fake news, the ETF was finally launched on January 10
All of this means that all potential stakeholders have plenty of time to prepare for this event.

However, when we look at the Ethereum ETF
There was little market discussion until March 20, when Bloomberg analysts raised their odds from 25% to 50%.
75%. On the same day, the news that the SEC required exchanges to prepare for spot Ethereum ETFs was confirmed.
The price surged, and three days later, the listing was officially approved. Since then, ETHE has returned to a level close to its net asset value.

So what's the big deal here? Apparently, a lot of people are caught off guard by this.
From the perspective of ETF issuers, they do not have enough time to educate their clients about Bitcoin. However, this may vary from case to case, but it is clear that Bitcoin ETFs
It has received a lot of media attention. Finally, for some capital allocators, launching such a high-profile product at the beginning of the year as the start of their annual performance is obviously a wise strategy. This may mean that the inflow rate is slower than Bitcoin because more education time is required, or vice versa; people may be more interested in Bitcoin because of Bitcoin.
In either case, I think investors will find Ethereum to be a more attractive digital asset.

Demand Agent

Some people claim that
There is little to no interest in ETH ETFs. While there is little data to support this assertion, there is plenty of data to suggest that the West, and especially Americans, have so far been less interested in ETH.
For example, while Binance is the largest centralized exchange in terms of user base and trading volume, Coinbase has more than 1.4 million tokens.
ETH (over $4.75 billion). To put this into context, Kraken, Robinhood, and Gemini (all US exchanges) have more ETH than
OKX, UpBit, Bybit, BitThumb and Crypto.com combined have more than that, with a surplus of 1.2 million ETH.
According to ethernodes.org, 34% of Ethereum nodes are run in the United States. What we really want to say is that Americans like
ETH, they have liked it for a while, and we expect this trend to continue and intensify with the launch of the spot ETH ETF.

Impact on DeFi

You can have your own opinion about what the flow of funds will look like in the short term, but in the medium to long term, we believe that the flow of funds will have a significant impact on the entire Ethereum supply. In @rewkang's article, he pointed out that Ethereum does not have "structural buyers" like Bitcoin (Saylor, Tether, whales), however, Ethereum does have important structural supply differences.

For example, when looking at ETH’s supply, it shows a consistent decline in the percentage of total supply held on exchanges, even below that of Bitcoin. Even more interestingly, the downward trend in supply on exchanges aligns almost perfectly with the launch of Uniswap v2 in May 2020.

Despite Ethereum’s wild price swings, this trend seems to be holding true

Furthermore, staking alone accounts for 27.57% of the entire ETH supply, which is more than any single entity in BTC in terms of percentage. Add in all the ETH locked in the canonical L2 bridge, and the ETH in the wrapped ETH contract, and you have over 32.33% of the entire ETH supply. This is all part of a larger trend.

DeFi
It has only been around for 5 years, and as liquid staking tokens and liquid re-staking tokens become the preferred tokens for DeFi users, this will increase the value of ETH.
Taking ETH off the exchange and locking it in a staking contract further disperses ETH's spot liquidity. Play for another ten or twenty years and ask yourself what will happen in the end. In addition, the more ETH
The more liquid staked or liquid re-staked, the more reflective the on-chain economy becomes.

Overall, we do not believe we have an advantage in predicting the dollar amounts of fund flows, but we think the reasons above give us a rough idea of ​​what the
ETH Spot ETF is for ETH
The impact of these structured products on the general supply pool of assets and the impact on attracting more investor interest in the token and on-chain economy. Finally, remember that price drives usage, usage drives narrative, and then narrative drives price. We continue to closely monitor the impact of these structured products on
The broad impact of ETH.