Grayscale’s upcoming Ethereum exchange-traded fund (ETF) is predicted to experience significant daily outflows, averaging around $110 million. Analysis firm Kaiko based this projection on the pattern observed with Grayscale’s Bitcoin Trust (GBTC) when it converted to an ETF, which saw 23% of its assets flow out in the first month, totaling $6.5 billion. Grayscale’s Ether Trust (ETHE) currently has $11 billion in assets under management (AUM), and if it faces similar outflows as GBTC, it could result in average daily outflows of $110 million, which represents about 30% of Ether’s average daily trading volume on Coinbase. Recent data has shown that ETHE has traded at a discount of up to 26% compared to its net asset value (NAV) over the past three months. Kaiko researchers expect outflows or redemptions to occur as the discount narrows once ETHE transitions into a spot ETF. A similar trend was observed with GBTC, as its discount to NAV significantly narrowed after conversion to an ETF. The recent approval of Ethereum ETFs has opened doors for more crypto investment products, according to TD Cowen’s Washington Research Group. This approval, which came about six months earlier than expected, confirms Ether’s status as a non-security and could extend to other tokens as well, solidifying their classification as commodities.
