As noted by ETF analyst Nate Geraci, the discount for Grayscale Ethereum Trust has decreased by 1.45% from a peak of about 50% within a year. This remarkable development is attributed to the approval of several Ethereum exchange-traded funds (ETFs). Just a month ago, the fund was trading at a discount of over 20% to its net asset value (NAV). However, the U.S. Securities and Exchange Commission (SEC) took a sharp turn by approving multiple 19b-4 filings. This sudden reversal shocked seasoned market observers who had expected the SEC to reject spot ETF filings, paving the way for a significant price surge in May.
Nevertheless, it’s important to note that these products have not yet begun trading, as their approval involves a two-step process. Now, the SEC must give the green light to several S-1 registration statements. SEC Chairman Gary Gensler has indicated that he expects these products to launch this summer, though he did not provide a more precise timeframe. Geraci recently suggested that the final approval of Bitcoin ETF products could occur as early as next week.
Earlier this week, potential ETF issuers, including BlackRock, Fidelity, and Grayscale, submitted their updated filings.
Read more Anticipation Grows for Imminent Approval of Ethereum ETFs
Will Grayscale Reduce Its Fees?
Grayscale’s GBTC has struggled to compete with other ETFs from heavyweight companies like BlackRock and Fidelity due to its exorbitant fees, which are five times higher than the average product fees (0.3%). Despite facing massive outflows, Grayscale has refused to cut fees on its flagship product. While some believe Grayscale might now lower fees to curb the outflows, Geraci does not think this will be the case. The analyst predicts that Grayscale will engage in a fee war via its Ethereum Mini Trust.
Furthermore, Geraci does not expect Grayscale’s Ether ETF to experience massive outflows: “I think the outflows are okay, but not as bad as we have seen with GBTC.”
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