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Author: Jesse Coghlan, CoinTelegraph; Compiled by: Wuzhu, Bitchain Vision
Grayscale’s spot Ethereum Exchange Traded Fund (ETF) that has not yet been launched may lose an average of $110 million a day if it follows a similar model to Grayscale’s Bitcoin Trust in the first month.
Grayscale Bitcoin Trust (GBTC) was converted from a closed-end fund to an ETF on January 1.Kaiko analysts wrote in a May 27 note that the company’s assets managed when it launched in November flowed out 23% in the first month, totaling $6.5 billion.
ETHE’s asset management scale is $11 trillion.Kaiko said that if its “outflow is similar to GBTC”, “this would be equivalent to $110 million in daily outflows, or 30% of the average daily trading volume of ETH on Coinbase.”
Grayscale’s ETHE has traded at up to 26% off its net asset value (NAV) over the past three months.Kaiko researchers noted that once it becomes a spot ETF, as the discount narrows, there is a reason to expect funds to flow out or redeemed.
The discount on GBTC relative to net asset value, which is trading below the value of assets held by the fund, narrows sharply after conversion to ETF.
Its trading price discount was as high as 17% before the conversion, but over time, the discount narrowed, allowing many holders to exit GBTC at the same price or higher as the buy price.
According to YCharts, the May 24 price is currently at a 0.03% discount and has been hovering at this level since then.
ETHE’s discount has narrowed since the SEC first approved the spot Ethereum ETF on May 23, although it has not yet begun trading as a spot ETF.
On May 1, the index’s discount margin narrowed steadily within a month, and then quickly reached a 1.28% discount on May 24, according to YCharts data.
Amid speculations about ETF approval, ETHE’s discount to net asset value has narrowed rapidly year to date and has narrowed again after approval.Source: YCharts
Kaiko analysts also pointed out that by the end of January, inflows from other Bitcoin ETFs had exceeded GBTC outflows.
Kaiko concluded that even if the inflow of Ether ETFs is “disappointing in the short term, approval has a significant impact on ETH as an asset, eliminating some regulatory uncertainties that have affected ETH over the past year.performance.”
