The Grayscale Ethereum Trust discount has seen a significant drop to 1.45% from nearly 50% over the past year, thanks to the approval of several Ethereum exchange-traded funds. The U.S. Securities and Exchange Commission surprised market observers by approving these 19b-4 forms, leading to a substantial price rally in May. However, despite the approval, these products have not started trading yet, as the SEC still needs to greenlight numerous S-1 registration forms. SEC Chair Gary Gensler expects these products to launch sometime this summer.
Speculation is rife about the final approval of Bitcoin ETF products, with ETF issuers like BlackRock, Fidelity, and Grayscale submitting updated filings earlier this week. Grayscale’s GBTC has struggled to compete with other ETFs due to its high fees, which are five times higher than the average fee for other products. Despite facing massive outflows, Grayscale has not lowered its fees for its crown jewel. Some believe that Grayscale may now consider lowering fees to combat these outflows, but ETF analyst Nate Geraci believes Grayscale will instead focus on conducting the fee war through the Ethereum Mini Trust.
Geraci also predicts that Grayscale’s Ether ETF will not experience significant outflows, unlike GBTC. While some expect decent outflows for the Ethereum ETF, Geraci does not believe it will be as bad as what was seen with GBTC. The approval of these ETFs has led to a renewed interest in Ethereum and Bitcoin, with investors eagerly awaiting their launch. The cryptocurrency market is expected to see increased volatility and price movements once these ETFs start trading, as they provide a more accessible way for traditional investors to gain exposure to digital assets.
Overall, the approval of Ethereum ETFs and the potential approval of Bitcoin ETFs mark a significant milestone for the cryptocurrency industry. Grayscale’s dominance in the market may be challenged by other ETFs from major players like BlackRock and Fidelity, especially if they offer lower fees. However, Grayscale’s unique position in the market and its focus on the Ethereum Mini Trust may help it maintain its stronghold despite the competition. As the summer approaches, all eyes are on the SEC and the ETF issuers for any further developments in this rapidly evolving space.
