A Look At Spot Ethereum ETF’s Effects on Buy and Sell Orders

Ethereum just saw the launch of its U.S. spot ETFs exactly ten years after its first ICO. This new ETF is a big deal for Proof-of-Stake blockchains, making them more accessible to mainstream investors and bringing more developers.

But it comes with a catch: it can’t stake, meaning investors miss out on the 3%-5% staking yield they’d get from holding Ethereum directly.

This regulatory block, plus the fact that Ethereum isn’t as widely understood as Bitcoin, might limit its short-term impact on the market, per SoSo Value.

When the Bitcoin Spot ETF hit the market, daily net inflows—basically, the new buying and selling activity—played a huge role in determining its price. The spot ETH ETF is expected to work the same way, but with a few differences.

Sell orders and the “migration effect”

Grayscale’s Ethereum Trust (ETHE) has much higher management fees than some competitors, leading to what’s called a “migration effect.” Investors may sell off ETHE shares to switch to cheaper options, causing a surge in sell orders. 

To ease this, Grayscale launched a low-fee Ethereum Mini Trust (ETH), which was given to existing ETHE investors, helping to offset some of the selling pressure. 

While sell orders are anticipated, SoSo says they might not be as dramatic as what was seen with Bitcoin. The discount on ETHE shares has narrowed significantly, making it less attractive for traders to cash out. 

As of late July, the discount is less than 1%, down from highs of 60%. This reduces the incentive for traders to sell off ETHE in favor of more profitable trades.

Bitcoin has always been marketed as “digital gold,” which is easy for most people to understand.

🫡My dear🫂 brother, please follow us so that you can benefit. ❤️Follow❤️ + 👍Like 👍 so we can distribute public gifts. Thank you

#ETH_ETFs_Trading_Today #Bitcoin_Coneference_2024 #BinanceHODLerBANANA #HamsterKombat #BinanceTurns7 $ETH

$ETH .