Grayscale’s Ethereum ETF: Could It Hurt ETH Prices?

Selling Pressure from Grayscale’s Outflows

A report by Kaiko warns that Grayscale’s Spot Ethereum ETF could put downward pressure on Ethereum prices. This is because the fund has been trading at a discount and investors may sell their shares to take profits.

Grayscale’s ETHE Fund

Grayscale’s Ethereum Trust (ETHE) has over $11 billion in assets. If the Spot Ethereum ETF sees similar outflows to Grayscale’s Bitcoin ETF, it could lose $110 million daily.

Impact on Ethereum Price

Outflows from Grayscale’s Bitcoin ETF have previously caused significant selling pressure on Bitcoin’s price. The same could happen to Ethereum if Grayscale’s Spot Ethereum ETF experiences similar outflows.

Fee Competition

Grayscale’s high fee for its Bitcoin ETF may have contributed to the outflows. If Grayscale offers a more competitive fee for its Ethereum ETF, it could reduce potential outflows.

Ethereum’s Future

Despite the potential selling pressure, Kaiko believes Ethereum is still poised for growth. Other Ethereum Spot ETFs could attract inflows that offset Grayscale’s outflows.

Regulatory Implications

The approval of Ethereum ETFs has positive implications for Ethereum as an asset. It confirms that it is not considered a security, removing regulatory uncertainty that has impacted its price.