Grayscale’s Ethereum ETF Could Lose $110 Million Daily in First Month: Kaiko

Grayscale’s yet-to-be-released Ether (ETH) exchange-traded fund (ETF) could lose an average of $110 million per day if it follows a similar pattern to the Grayscale Bitcoin Trust in its first month.

Grayscale Bitcoin Trust (GBTC) converted from a closed-end fund to an ETF on January 11, and upon launch, 23% of assets under management were outflowed in the first month, totaling $6.5 billion, Kaiko analysts said in May. I wrote it. 27 Report.

ETHE’s AUM is $11 billion. According to Kaiko, if there were a “similar outflow scale” to GBTC, “the average daily outflow would be $110 million, or 30% of the average daily volume of ETH on Coinbase.”

Over the past three months, Grayscale’s ETHE has been trading at discounts of up to 26% to net asset value (NAV). Kaiko researchers noted that once a spot ETF becomes available, it is “reasonable to expect” outflows or redemptions as the discount narrows.

GBTC’s discount to NAV (the amount it traded below the value of its holdings in the fund) declined sharply after converting to an ETF.

Before the conversion, it was trading at a discount of up to 17%, but over time that range narrowed, allowing many holders to get out at a price equal to or better than what they purchased at GBTC.

According to YCharts, the current discount rate on May 24th is 0.03% and has remained at that level since then.

ETHE’s discount has already narrowed since the Securities and Exchange Commission approved a spot Ether ETF on May 23, but it has not yet begun trading as a spot ETF.

Related: What comes after the spot Ether ETF is approved? Management’s Evaluation

On May 1, ETHE traded at a discount of more than 25%, then declined steadily throughout the month amid speculation that the SEC would approve a spot Ether ETF, before quickly reaching a 1.28% discount on May 24, according to YCharts data. I did.

Kaiko analysts also noted that outflows from GBTC outpaced inflows into other Bitcoin ETFs by the end of January.

Kaiko concluded that although Ether ETF inflows “are disappointing in the short term, approval has a significant impact on ETH as an asset and removes some of the regulatory uncertainty that has impacted ETH’s performance over the past year.”

magazine: Joe Lubin — The truth about the ETH founders’ split and ‘Crypto Google’