% 0.99
BTC Dominance:
% 0.21
Market Cap:
$2.38 T
% 1.77
Fear & Greed:
74 / 100
$ 66.193
BTC Dominance:
% 54.5
Market Cap:
$2.38 T

Grayscale Bitcoin Trust (GBTC) and Ether (ETHE) Transition to ETFs: Market Implications

Ethereum Etf

From a closed-end fund to an ETF on Jan. 11, the Grayscale Bitcoin Trust (GBTC) had 23% of its assets under management at launch flow out in the first month—a total of $6.5 billion, Kaiko analysts said in May 27 research.

ETHE has $11 billion in AUM. Kaiko says, “This would amount to $110 million of average daily outflows, or 30% of ETH’s average daily volume on Coinbase,” if its outflows were “similar to GBTC.”

Discount Dynamics and Market Response

Grayscale’s ETHE traded for the last three months at up to a 26% discount to its net asset value (NAV.). Once it becomes a spot ETF, Kaiko analysts observed “reasonable to expect” inflows or redemptions when that discount narrows.

After converting to an ETF, GBTC’s discount to NAV—how much it traded below the value of the fund’s holdings—markedly shrank.

Before its conversion, it traded at up to a 17% discount, but over time it has closed, allowing many investors to leave GBTC for either the same price they obtained or better.

YCharts show that it is currently at a 0.03% discount for May 24, a level it has generally maintained since then.

Though it hasn’t started trading as a spot ETF yet, ETHE’s discount has already closed since the Securities and Exchange Commission approved spot Ether ETFs on May 23.

ETHE traded at an almost 25% discount on May 1, but rapidly dropped to a 1.28% discount on May 24. YCharts data reveals that, on optimism, the SEC would permit spot Ether ETFs before slowly decreasing over the month.

READ:  SEC Deferred Ethereum ETF Applications

By the end of January, Kaiko researchers also saw that inflows into other Bitcoin ETFs exceeded withdrawals from GBTC.

Kaiko said even if Ether ETF inflows “disappoint in the short term, the approval has important implications for ETH as an asset, removing some of the regulatory uncertainty that has weighed on ETH’s performance over the past year.”

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