Grayscale Moves $1 Billion into Ether Mini ETF Ahead of Ethereum ETF Launch
Asset manager Grayscale was identified moving $1b in Ether as it prepares to transform its multibillion-dollar Ethereum Trust into two ETFs with varying fees.
It follows the SEC approving several spot Ethereum ETFs to begin trading on Tuesday, July 23. These include ETFs from 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck, and Invesco Galaxy, all launching after weeks of revisions to their registration statements.
On Tuesday, blockchain monitoring service Whale Alert noted that an unidentified wallet moved 292,262 ETH, worth more than $1b, to Coinbase Institutional.
Bloomberg ETF strategist Eric Balchunas suggested that Grayscale is transferring funds from its Trust to its new Grayscale Ethereum mini-ETF. The amount could likely be seed capital for the mini-Trust. According to its website, the Grayscale Ethereum Trust currently holds 2.6m ETH .
Mini Ethereum Trust Targets Retail Investors with Lower Prices
Grayscale plans to transform its Ethereum Trust (ETHE), which manages roughly $10b in assets, into an ETF while maintaining its current 2.5% fee. Additionally, the firm has structured its Mini Ethereum Trust (ETH) to allocate 10% of ETHE’s ether holdings to this more affordable product.
The Grayscale Ethereum Mini Trust (ETH) is aimed at attracting retail investors. Each share of this mini trust, distinct from Grayscale’s primary ether ETF (ETHE), provides a smaller portion of the underlying ether compared to its larger counterpart. Thus, its price is correspondingly lower.
Challenges in ETF Documentation
Meanwhile, Bloomberg ETF analyst James Seyffart noted that Grayscale’s ETHE and ETH are the only funds in the Ethereum ETF race lacking official effective documents from the SEC. He mentioned that the process of spinning off $ETH from $ETHE involves more complexity than starting entirely new funds, making the finalization of these documents potentially more intensive.
All spot Ether ETFs, excluding the Grayscale Ethereum Trust, will have a base fee ranging from 0.15% to 0.25%. Additionally, the Grayscale Ethereum Mini Trust plans to waive fees for the first six months or until it accumulates $2b in net assets, whichever happens first.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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