The research team of cryptocurrency data provider Kaiko stated that if Grayscale has not converted its Ethereum Trust Fund (ETHE) into an ETF, following a similar pattern to its Bitcoin Trust Fund (GBTC) after conversion, there could be a daily outflow of $110 million on average.
Grayscale’s Bitcoin Trust Fund received approval from the U.S. Securities and Exchange Commission (SEC) on January 11th, and after converting from a closed-end fund to a spot ETF, its assets under management (AUM) saw a net outflow of up to 23% in the first month, totaling around $6.5 billion.
In a report on May 27th, Kaiko analysts pointed out that Grayscale’s Ethereum Trust Fund (ETHE) currently has an AUM of $11 billion. If it officially transitions to an ETF and replicates the historical outflow speed of GBTC funds, it would mean an average daily outflow of $110 million, equivalent to 30% of the average daily trading volume of Ethereum (ETH) on Coinbase.
Over the past three months, Grayscale’s ETHE has traded at a discount of -26%, much lower than its Net Asset Value (NAV). However, recently, due to the SEC approving 19b-4 filings from multiple issuers, taking a significant step towards an Ethereum spot ETF, the discount rate has significantly narrowed to -1.28%.
Kaiko researchers pointed out that once it transitions into a spot ETF, these buyers based on arbitrage purposes will seek to sell, hence it is “reasonably expected” to see outflows or redemptions.