Grayscale’s Ethereum ETF could bleed $110M daily in first month: Kaiko
If Grayscale’s slated spot Ether ETF follows the same path as its Bitcoin one, there could be some short-term pressure on the price of ETH.
Grayscale’s yet-to-launch spot Ether
tickers down
$3,841
exchange-traded fund (ETF) could bleed an average of $110 million per day if it follows a similar pattern to its Grayscale Bitcoin Trust in the first month.
The Grayscale Bitcoin Trust (GBTC) converted from a closed-end fund to an ETF on Jan. 11, which saw 23% of its assets under management at launch flow out in the first month — totaling $6.5 billion, Kaiko analysts wrote in a May 27 report.
ETHE has an AUM of $11 billion. If it has “a similar magnitude of outflows” as GBTC, “this would amount to $110 million of average daily outflows or 30% of ETH’s average daily volume on Coinbase,” according to Kaiko.
In the past three months, Grayscale’s ETHE traded at up to a 26% discount to its net asset value (NAV). Kaiko researchers noted that once it becomes a spot ETF, it’s “reasonable to expect” outflows or redemptions as that discount narrows.
GBTC’s discount to NAV — how much it traded below the value of the fund’s holdings — sharply narrowed after it converted to an ETF.
It traded at up to a 17% discount before its conversion but has narrowed over time, allowing many holders to exit GBTC at either the same price they got in or better.
According to YCharts, it’s now at a 0.03% discount for May 24, a level it has hovered around since then.
ETHE’s discount has already narrowed since the Securities and Exchange Commission gave the initial nod to spot Ether ETFs on May 23, though it has yet to begin trading as a spot ETF.
