all Latest Market Reports Research firm Kaiko noted how Grayscale’s Spot Ethereum ETF could have a negative impact on the Ethereum (ETH) price. This is based on the company’s expectation that Grayscale’s Ethereum Trust (ETHE) could follow a similar path. Grayscale’s Bitcoin Trust (GBTC).
Ethereum could face significant selling pressure due to the Grayscale leak.
Kaiko pointed out. Ethereum Once the Spot Ethereum ETF begins trading, it could face significant selling pressure from Grayscale’s ETHE. The reason is that the fund discount deals It has been between 6% and 26% over the last three months and is likely to be matched by a wave of profit taking. It is worth mentioning that Grayscale’s ETHE previously operated as a closed-end fund and Grayscale applied to convert it into an exchange-traded fund (ETF).
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The research firm said Grayscale’s ETHE has more than $11 billion in assets under management (AuM). This means that if Grayscale’s Ethereum ETF saw outflows of a similar magnitude as Grayscale’s Bitcoin ETF, an average of $110 million in daily outflows could leave the fund. Grayscale’s Bitcoin ETF saw outflows of $6.5 billion or 23% of the fund’s AuM in its first month of trading.
Grayscale’s Bitcoin Trust (GBTC) It operated in a similar way before converting to an ETF. This is believed to have contributed to the $6.5 billion outflows the fund recorded in its first month of trading, with many investors profiting after buying the fund at a discount. Kaiko therefore anticipates something similar could happen with Grayscale’s ETHE.
The leak is Grayscale’s Spot Bitcoin ETF It is known that the price of the flagship cryptocurrency has fallen significantly, putting significant selling pressure on the price of Bitcoin. So, if Grayscale’s Spot Ethereum ETF suffers a similar fate, the same can be expected for the price of Ethereum.
However, in addition to investors earning profits with Grayscale’s Bitcoin ETF, Grayscale’s fund fees are also believed to be another factor that triggered the Bitcoin ETF. significant outflow It was recorded then. For context, Grayscale’s fees were the highest among all Bitcoin ETF issuers. Therefore, if asset managers become fee competitive this time, potential outflows from the Grayscale Ethereum ETF could be reduced to a minimum.
Ethereum’s Future Trajectory Remains Optimistic
Kaiko suggested. Ethereum If other Ethereum Spot ETFs start recording impressive inflows that could overshadow Grayscale’s ETHE outflows, they could still achieve significant price gains. As Kaiko points out, something similar happened with Bitcoin. Grayscale GBTC leaked By the end of January, it had been offset and surpassed by inflows from other Bitcoin ETFs.
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Thanks to the impressive demand recorded by these Bitcoin ETFs, the flagship cryptocurrency New All-Time High (ATH) Early March this year. The Ethereum ETF may trigger such a rally in the price of ETH, depending on the volume of inflows the fund records once trading begins.
Meanwhile, Kaiko noted that even if inflows are disappointing in the short term, the mere acceptance of these funds already has a “significant impact on ETH as an asset,” as it confirms that it is not a security. This helped with the removal. regulatory uncertainty This weighed on the price of Ethereum for some time.
Featured image from NewsBTC, chart from Tradingview.com