ETF analyst Nate Geraci said the Grayscale Ethereum Trust’s discount has narrowed to 1.45% from a one-year high of nearly 50%. Such incredible growth is thanks to the approval of a series of Ethereum exchange-traded funds.
Grayscale Ethereum Trust discount has gone from nearly 50% to 1.5% in 1yr…
Was 20%+ just before “surprise pivot by SEC” in mid-May. pic.twitter.com/6i8AXddHlB
— Nate Geraci (@NateGeraci) June 22, 2024
Just a month ago, the fund was trading at a discount of more than 20% to its net asset value (NAV). However, the U.S. Securities and Exchange Commission’s sudden approval of several 19b-4 forms shocked seasoned market observers, who predicted the SEC would reject the Ether filing ETF spot and pave the way for a significant rally in May.
ETH price chart 1 day. Source: TradingView
However, it is worth noting that these products have not yet started trading as approval is a two-step process. Now, the SEC must give the green light to S-1 registration forms.
SEC Chairman Gary Gensler expected the products to launch this summer without giving an exact time frame. Geraci recently suggested that final approval for ETH ETF products could happen as soon as next week.
Earlier this week, potential ETF issuers, including BlackRock, Fidelity and Grayscale, submitted their updated S-1 filings.
Will Grayscale reduce fees?
Grayscale’s GBTC has difficulty competing with other ETFs from heavyweights like BlackRock and Fidelity due to hefty fees that are five times higher than the average fee for other products (0.3% ). Grayscale refuses to reduce fees despite facing massive capital outflows.
While some believe that Grayscale may now move to lower fees to prevent massive outflows, Geraci takes an opposing view, predicting that Grayscale will wage a fee war through the Ethereum Mini Trust . Furthermore, Geraci does not expect Grayscale’s Ether ETF to see large capital outflows:
“My guess is that the outflow will be moderate, and not as bad as GBTC.”
Itadori
According to U.today
