The upcoming launch of a spot Ethereum (ETH) exchange-traded fund could initially put selling pressure on the second-largest crypto asset by market cap, according to market research firm Kaiko.
Last week, the U.S. Securities and Exchange Commission (SEC) approved the listing of a spot market Ethereum ETF, paving the way for the product to be traded on U.S. stock exchanges.
In a new analysis, Kaiko researchers note that the approval could lead to large daily outflows from Grayscale's Ethereum Trust (ETHE), which the researchers note has been trading at discounts ranging from 6-26% over the past three months.
“ETHE currently manages over $11 billion in assets, making it by far the largest ETH investment vehicle. GBTC’s Bitcoin ETF saw outflows of $6.5 billion in its first month of trading, roughly 23% of the ETF’s size. [assets under management] As of release date.
If ETHE outflows were of a similar scale, that would amount to an average daily outflow of $110 million, or 30% of ETH’s average daily trading volume on Coinbase.”
However, Silkco researchers noted that by the end of January, a few weeks after the SEC approved the BTC ETF, inflows into other Bitcoin (BTC) ETFs more than offset and surpassed outflows from Grayscale’s Bitcoin Trust (GBTC).
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