As an experienced ETF analyst, I have closely followed the developments in the Ethereum market and Grayscale’s trusts. The recent approval of several Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has caused a significant shift in the market.
According to Nate Geraci, an ETF analyst, the price discrepancy between the Grayscale Ethereum Trust and the actual Ethereum market has significantly narrowed. A year ago, this gap reached almost 50%, but now it stands at just 1.45%.
Such a stunning development is due to the approval of a slew of Ethereum exchange-traded funds.
Approximately a month ago, the fund’s stock price fell more than 20% below its net asset value (NAV). Yet, market watchers were taken aback when the U.S. Securities and Exchange Commission (SEC) unexpectedly approved multiple 19b-4 forms. Contrary to predictions, the SEC didn’t reject Ethereum ETF applications, instead facilitating a substantial price surge in May.
As a crypto investor, I want to highlight that it’s important to keep in mind that these new cryptocurrency products have not yet begun trading, despite receiving approval. The Securities and Exchange Commission (SEC) still needs to review numerous S-1 registration forms before giving the final go-ahead. According to U.Today, SEC Chair Gary Gensler has indicated that we can expect the launch of these products this summer, but he hasn’t provided a specific date.
As a researcher following the developments in the Bitcoin Exchange-Traded Fund (ETF) market closely, I’m excited to share that Geraci’s recent statements indicate a potential final approval for Bitcoin ETF products coming up in the next week.
This week, BlackRock, Fidelity, and Grayscale, among other potential ETF creators, have recently submitted revised applications for regulatory approval.
Will Grayscale drop fees?
Grayscale’s GBTC struggled to keep up with rival ETFs from industry giants BlackRock and Fidelity due to its significantly higher fees, which were five times the average cost of these funds (0.3%). Despite facing substantial redemptions, Grayscale remained unwilling to reduce the fees for its flagship product.
Some people think that Grayscale may reduce its fees to stem massive withdrawals, but according to Geraci, this is an unlikely scenario. Instead, he anticipates that Grayscale will engage in a fee war through the Ethereum Mini Trust.
Additionally, Geraci predicts that Grayscale’s Ethereum ETF may experience moderate outflows instead of the significant ones observed with GBTC.
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2024-06-23 15:42