After the Ethereum spot ETF successfully passed the test, the price of ETH fell after a brief rise. At the same time, the potential selling pressure of Grayscale, which owns millions of ETH, also caused market concerns. However, judging from the outflow of funds from GBTC, its selling pressure has been absorbed by other Bitcoin ETFs and has not had much impact on the price of Bitcoin.

In the early morning of May 24, with the 19B-4 forms of 8 spot Ethereum ETFs approved by the US SEC, it was only a matter of time before they were listed for trading. After the Ethereum spot ETF successfully "passed the test", the price of ETH fell after a brief rise. At the same time, the potential selling pressure of Grayscale, which owns millions of ETH, also caused market concerns.


It may be listed in June, but the scale of funds is limited due to the lack of a pledge mechanism

James Seyffart, an ETF analyst at Bloomberg, said that the S-1 approval of the Ethereum spot ETF may be completed within a few weeks, but it may also take longer, usually up to five months. Shenyu, co-founder of Cobo, predicts that the Ethereum ETF may be approved in early June and start trading in mid-June, referring to the Bitcoin ETF. The market is bullish, but whales and institutions are also selling. It is generally believed that the space for Ethereum ETF is limited and may obtain 10% to 15% of Bitcoin ETF assets. Retail funds may dominate in the early stage, and institutional investors may gradually enter later. The cancellation of the pledge mechanism for compliance requirements has weakened demand, but analysts predict that after the addition of the pledge mechanism, the market size of Ethereum ETF is expected to be close to 75% of Bitcoin ETF.

Grayscale becomes a weathervane for the probability of ETF approval, and the selling pressure may be absorbed by the market

Grayscale is regarded by the outside world as one of the important indicators to measure the probability of ETF approval.

In the previous game of Bitcoin spot ETF listing expectations, Grayscale GBTC's negative premium had narrowed all the way. Similarly, as the market's expectations for the approval of Ethereum spot ETFs heat up, investors have also begun to buy a large number of discounted shares of Grayscale Ethereum Trust (ETHE) before the ETF is officially converted, but unlike GBTC, this optimism started in the past week.

Data from The Block shows that since May 17, the trading volume of Grayscale Ethereum Trust (ETHE) has begun to increase significantly, and on May 21, it achieved a trading volume of over US$687 million, setting a record high since May 2021. In the month before that, ETHE's trading volume was mostly between US$20 million and US$40 million. At the same time, ETHE's discount to its net asset value (NAV) has also narrowed significantly from 20.52% on May 17 to 7.19% today, and the negative premium rate once expanded to 26% last month.

These data also show market confidence to a certain extent. However, once the Ethereum spot ETF is officially listed, Grayscale, which holds a large amount of ETH, is also considered to be at risk of a market crash. Such concerns of investors are not groundless.

In fact, since Grayscale GBTC was successfully converted into a Bitcoin spot ETF, Farside Investors data showed that GBTC's cumulative net outflow reached US$17.64 billion. It is also the only ETF with such a high outflow and has continued to outflow funds for nearly 4 months. Coinglass data shows that as of May 24, GBTC's asset management scale is US$19.413 billion.

According to Coinglass data, as of May 24, Grayscale held 2.9352 million ETH, worth more than $11.17 billion. Although Grayscale's Bitcoin holdings far exceed those of Ethereum, the flight of arbitrage profits and the lack of a pledge mechanism for ETFs are also believed to have led to capital outflows.

However, judging from the overall change in Bitcoin ETF funds, the outflow of funds from GBTC has been completely covered by other ETFs. According to Farside Investors data, as of May 22, Bitcoin spot ETFs still had a net inflow of more than $13.43 billion. And from the perspective of price performance, the current price of Bitcoin has risen by about 45% compared to when the ETF was launched.

In other words, although the outflow of funds from GBTC has brought some selling pressure to Bitcoin, it has been absorbed by other Bitcoin ETFs and has not had much impact on the price of Bitcoin. This also has certain reference significance for the impact of the Grayscale Ethereum ETF on the price of ETH after its launch. #EarnFreeCypto2024 #ETHETFsApproved $BTC $ETH #现货以太坊ETF获美SEC批准