As a seasoned crypto investor with a deep understanding of the market, I believe that Grayscale’s upcoming Ethereum ETF, ETHE, could experience significant outflows similar to what we saw with its Bitcoin counterpart, GBTC. Based on the Kaiko analysts report and my own analysis of GBTC’s experience following its transition to an ETF earlier this year, I estimate that ETHE could see daily outflows averaging around $110 million.
As a researcher studying the digital asset management landscape, I’ve come across intriguing insights regarding Grayscale’s upcoming Ethereum-based ETF, ETHE. According to a Kaiko analysts report, this new ETF could potentially experience significant daily outflows averaging around $110 million, much like what we observed with Grayscale Bitcoin Trust (GBTC) following its transformation into an ETF earlier this year. The first month post-transition saw GBTC experiencing substantial outflows amounting to a staggering $6.5 billion.
Using ETHE’s asset under management (AUM) of $11 billion, the equivalent outflow rate would be approximately 30% of Ethereum’s daily trading volume on Coinbase. The price of ETHE reached a 26% discount relative to its net asset value (NAV), potentially triggering outflows once it was converted into an ETF.
The discount between GBTC’s price and the value of its underlying Bitcoin holdings has significantly decreased. Similarly, ETHE’s discount is anticipated to narrow following recent regulatory approvals from the SEC, which could lead to price stability for ETHE post-ETF.
Kaiko analysis noted that although there were early withdrawals from the GBTC Bitcoin ETF, other Bitcoin ETFs experienced greater inflows by the end of January. This observation implies a growing investor trust in crypto-based ETFs as a whole.
Grayscale’s Ether ETF gaining approval brings welcomed clarity to regulators, which could boost Ethereum’s market momentum despite uncertain inflows into short-term ETFs.
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2024-05-28 07:32