Key Takeaways:
- Grayscale’s spot Ether ETF might see daily outflows of $110 million in its first month, similar to the trend observed with GBTC.
- ETHE, managing $11 billion in AUM, could experience outflows impacting ETH prices due to significant volume relative to Coinbase’s daily trading.
- The NAV discount for ETHE, recently as high as 26%, is expected to narrow upon ETF conversion, as seen with GBTC.
Grayscale’s soon-to-launch spot Ether ETF could see daily outflows of $110 million in its first month, similar to the trend observed with the Grayscale Bitcoin Trust (GBTC) upon its conversion to an ETF, according to Kaiko analysts.
When GBTC converted, it experienced significant outflows totaling $6.5 billion, representing 23% of its assets under management (AUM) in the first month.
According to @KaikoData, the upcoming spot #Ethereum ETF from @Grayscale may see significant daily outflows of around $110 million based on patterns observed with its #Bitcoin Trust conversion. pic.twitter.com/06Wo49F9Mi
— Bitcoin.com News (@BTCTN) May 28, 2024
The Ethereum ETF (ETHE), currently managing $11 billion in AUM, might face similar outflows, potentially impacting ETH prices due to the significant volume relative to daily trading on Coinbase.
Over the past three months, ETHE has traded at a discount of up to 26% below its net asset value (NAV).
📉 Kaiko reports that converting Grayscale’s Ethereum Trust (ETHE) to a spot ETF could put short-term downward pressure on ETH price, citing a $6.5 billion outflow from Grayscale Bitcoin Trust (GBTC) post-ETF conversion. If this pattern holds, ETHE could see $110 million in daily…
— BitcoinWorld Media (@ItsBitcoinWorld) May 28, 2024
This discount is expected to narrow upon conversion to a spot ETF, leading to anticipated outflows.
GBTC saw its NAV discount diminish sharply post-conversion, with its discount dropping to 0.03% by May 24.
ETHE’s discount also narrowed significantly from 25% to 1.28% between May 1 and May 24, amid speculation and subsequent SEC approval for spot Ether ETFs.
Kaiko notes that initial outflows might be offset by future inflows into other Ether ETFs, highlighting the approval’s significance for reducing regulatory uncertainty surrounding Ethereum.
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