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Grayscale Ethereum Trust Discount Shrinks to 1%

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Sun, 23/06/2024 - 12:36
Grayscale Ethereum Trust Discount Shrinks to 1%
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As noted by ETF analyst Nate Geraci, the Grayscale Ethereum Trust discount has plunged to 1.45% from a peak of nearly 50% within a year.

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Such a stunning development is due to the approval of a slew of Ethereum exchange-traded funds.

Just a month ago, the fund was trading at a more than a 20% discount to net asset value (NAV). However, the U.S. Securities and Exchange Commission made a sharp U-turn by approving several 19b-4 forms. The sudden reversal shocked seasoned market observers who expected the SEC to shoot down spot Ether ETF filings and paved the way for a significant price rally in May.

However, it is worth noting that these products are yet to start trading since their approval is a two-step process. Now, the SEC has to green-light numerous S-1 registration forms. As reported by U.Today, SEC Chair Gary Gensler said that he expected the products to launch this summer without giving a more precise time frame.

Geraci recently suggested that the final approval of Bitcoin ETF products could take place as soon as next week. 

Earlier this week, prospective ETF issuers, including BlackRock, Fidelity and Grayscale, submitted their updated filings.

Will Grayscale drop fees? 

Grayscale's GBTC found it hard to compete with other ETFs from such heavyweights as BlackRock and Fidelity due to its exorbitant fees that are five times higher than the average fee for the other products (0.3%). Grayscale refused to lower fees for its crown jewel despite facing massive outflows.

While some believe that Grayscale might now move to lower fees in order to record horrendous outflows, Geraci does not believe that this will be the case. The analyst has predicted that Grayscale will conduct the fee war via the Ethereum Mini Trust. 

Moreover, Geraci does not expect Grayscale's Ether ETF to record massive outflows: "My guess is decent outflows, but not as bad as we saw w/ GBTC."

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