Ethereum ETF by Grayscale Records $484 Million in Outflows on Debut
Investors withdrew a substantial $484 million from the Grayscale Ethereum Trust (ETHE) as it transitioned to trading as an ETF on its inaugural trading day, data disclosed by Farside indicates.
On the same day, ETHE witnessed trading of $458 million worth of shares, signaling significant selling activity following the outflows. Bloomberg ETF analyst Eric Balchunas approximates that the outflows amount to about 5% of the fund’s total value.
Grayscale has been a prominent player in the Ethereum investment arena, with its Ethereum Trust being a top choice for regulated Ethereum investments, boasting assets exceeding $9 billion as of July 2024. However, with other market players entering the scene, there might be a shift towards these new products, given that Grayscale’s Ethereum ETF is perceived as more expensive compared to others.
In comparison to Grayscale’s Bitcoin Trust experience, outflows from the Grayscale Ethereum Trust were somewhat anticipated. ETHE carries an expense ratio of 2.5%, making it the costliest US ETF directly invested in Ethereum.
Conversely, the Grayscale Ethereum Mini Trust (ETH), a new offering from the firm, emerges as one of the most cost-effective spot Ethereum funds in the US market. The fund incurs a management fee of 0.15% of the trust’s net asset value, with this fee being waived for the initial six months of trading or up to a maximum of $2 billion in assets under management (AUM).
ETH’s 0.15% fee undercuts fees of competing spot Ethereum ETFs from providers like BlackRock, Fidelity, and Invesco, which range from 0.19% to 0.25%, as reported by Crypto Briefing.
This strategic move by Grayscale could potentially attract assets and mitigate significant outflows from ETHE, prompting Van Buren Capital partner Scott Johnsson to note that it “puts a lot more pressure on Blackrock and others to market their product out of the gate.”
Grayscale’s ETH garnered over $15 million in net inflows on its debut day. Concurrently, at least five other Ethereum ETFs saw net inflows on their first day of trading. Bitwise’s ETHW attracted $204 million, Fidelity’s FETH received $71.3 million, Franklin Templeton’s EZET drew in $13.2 million, 21Shares’ CETH and VanEck’s ETHV reported $7.5 million and $7.6 million in net inflows, respectively.
