- Grayscale’s upcoming Ether ETF, ETHE, could see substantial outflows averaging $110 million daily.
- Kaiko analysts noted that despite GBTC outflows, other Bitcoin ETFs had inflows surpassing these outflows by January.
- SEC nod to spot Ether ETFs led ETHE’s discount to drop from 25% to 1.28% in May.
Kaiko analysts said that Grayscale’s planned Ether ETF, ETHE, might have to bleed out $110 million per day. This was like its Bitcoin counterpart’s experience. The trust switched to an ETF earlier this year and experienced $6.5 billion in outflows in its first month.
Status of Spot Ether ETFs
The SEC approved plans for spot ETH ETFs. This prompted a big shift in ETH sentiment. The regulator authorized 19b-4 files from the NYSE, Cboe, and Nasdaq on Thursday evening. It will assess S-1 forms from BlackRock, Fidelity, and VanEck. ETH ETFs will begin trading after approval, several weeks before being offered.
Ethereum Is A Commodity
Will Cai, Head of Indices at Kaiko, believes the SEC’s approvals say that ETH is a commodity rather than a security, which has huge favorable implications for U.S. regulation of comparable tokens. The debut of ETH ETFs may result in selling pressure owing to Grayscale’s ETHE, which has traded at a discount ranging from 6% to 26% over the last three months.
GBTC Outflows Vs. ETHE outflows
Grayscale Ethereum Trust (ETH) is the big ETH trading entity, with assets under control totaling over $11 billion. GBTC’s outflows during the first month of trading for bitcoin ETFs were $6.5 billion, or 23% of its AUM as of launch day. If ETHE outflows were comparable, they would equal $110 million in average daily outflows or 30% of ETH’s average daily volume on Coinbase, according to Kaiko.
ETHE traded at a more than 25% discount on May 1 before decreasing over the month on speculation that the SEC will permit spot Ether ETFs, reaching a 1.28% discount on May 24, according to YCharts data. Investment return and principal value may fluctuate, and current performance may be lower or higher than the quoted data. ETF shares are bought and sold at market price, not NAV, and may trade at a discount or premium. Shares are not redeemable and can only be acquired or redeemed in creation units. Brokerage commissions may reduce returns.
