The imminent arrival of exchange-traded funds (ETFs) for Ethereum (ETH) could initially result in a decrease in selling pressure on the second-largest cryptocurrency by market cap, according to market intelligence firm Kaiko. The US Securities and Exchange Commission (SEC) recently granted approval for the listing of spot market Ethereum ETFs, allowing these products to be traded on US stock exchanges. In a new analysis, Kaiko researchers suggest that this approval could lead to significant daily outflows from Grayscale’s Ethereum Trust (ETHE). The researchers highlight that ETHE has been trading at a discount of between 6% and 26% over the past three months. With ETHE currently managing over $11 billion in assets, making it the largest ETH investment vehicle, the researchers draw a comparison to the outflows experienced by Grayscale’s Bitcoin Trust (GBTC) when Bitcoin ETFs were launched. In the first month of trading for Bitcoin ETFs, GBTC saw outflows amounting to $6.5 billion, which accounted for roughly 23% of its assets on launch day. The Kaiko researchers estimate that if ETHE were to experience a similar level of outflows, it would result in average daily outflows of $110 million, equivalent to 30% of ETH’s average daily trading volume on Coinbase. However, the researchers also note that inflows into other Bitcoin ETFs offset and exceeded outflows from GBTC by the end of January, a few weeks after the SEC approved the Bitcoin ETFs.
