Kaiko: Grayscale Ethereum Spot ETF to Experience Daily Outflow of $110 Million if Following GBTC Model

Kaiko: Grayscale Ethereum Spot ETF to Experience Daily Outflow of $110 Million if Following GBTC Model

Kaiko: Grayscale Ethereum Spot ETF to Experience Daily Outflow of $110 Million if Following GBTC Model

The research team at Kaiko, a cryptocurrency data provider, has indicated that if Grayscale’s Ethereum Trust Fund (ETHE) follows a similar pattern to its Bitcoin Trust Fund (GBTC) after conversion, there could be a daily outflow of $110 million.

Grayscale’s Bitcoin Trust Fund, which received approval from the U.S. Securities and Exchange Commission (SEC) on January 11th, experienced a net outflow of up to 23% of its assets under management (AUM), totaling approximately $6.5 billion in its first month after transitioning from a closed-end fund to a spot ETF.

In a report on May 27th, Kaiko analysts stated that Grayscale’s Ethereum Trust Fund currently has an AUM of $11 billion. If it officially 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 the 19b-4 filings of multiple issuers, an important step has been taken towards an Ethereum spot ETF, resulting in a significant narrowing of the discount rate to -1.28%.

Kaiko researchers pointed out that once it becomes a spot ETF, buyers with arbitrage intentions will seek to sell, so it can be “reasonably anticipated” that there will be outflows or redemptions.