The research team at cryptocurrency data provider Kaiko has indicated that if Grayscale’s Ethereum Trust Fund (ETHE) follows a similar pattern to its Bitcoin Trust Fund (GBTC) after conversion, it could experience a daily outflow of $110 million on average.
Grayscale’s Bitcoin Trust Fund saw a net outflow of up to 23% of its assets under management (AUM), totaling approximately $6.5 billion, in the first month after receiving approval from the US Securities and Exchange Commission (SEC) to transition from a closed-end fund to a spot ETF on January 11.
According to Kaiko analysts in a report on May 27, Grayscale’s Ethereum Trust Fund currently has an AUM of $11 billion. If it formally transitions to an ETF and replicates the outflow rate of GBTC, it would mean an average daily outflow of $110 million, equivalent to 30% of the average daily trading volume of Ethereum (ETH) on Coinbase.
Over the past three months, Grayscale’s ETHE has traded at a discount of -26% to its net asset value (NAV). However, recently, with the SEC approving the 19b-4 filings of multiple issuers, an important step has been taken towards an Ethereum spot ETF, resulting in a significant reduction in the discount rate to -1.28%.
Kaiko researchers pointed out that once it becomes a spot ETF, arbitrage-driven buyers will seek to sell, thus it can be “reasonably expected” to experience outflows or redemptions.
