The research team at cryptocurrency data provider Kaiko suggests that if Grayscale’s Ethereum Trust Fund (ETHE) follows a similar pattern to its Bitcoin Trust Fund (GBTC) after conversion, it may experience an average daily outflow of $110 million.
Grayscale’s Bitcoin Trust Fund saw a net outflow of up to 23% of its assets under management (AUM), approximately $6.5 billion, in the first month after converting from a closed-end fund to a spot ETF, following approval from the U.S. Securities and Exchange Commission (SEC) on January 11.
According to analysts at Kaiko in their 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, which is equivalent to 30% of the average daily trading volume of Ethereum (ETH) on Coinbase.
Over the past three months, ETHE has traded at a discount of -26% to its net asset value (NAV), but recently, with the SEC approving multiple issuers’ 19b-4 filings, an important step has been taken towards an Ethereum spot ETF, resulting in a significant narrowing of the discount to -1.28%.
Kaiko researchers point out that once it becomes a spot ETF, arbitrage buyers will seek to sell, leading to an expected outflow or redemption.
