Just four days before the launch of its Spot Ethereum ETF products, Grayscale announced some significant changes to its fee structure. Thus making the ETH mini-trust the cheapest among its competitors. The ETF analyst warns against buying ETH before the launch of the ETF due to the potential disadvantages revealed by the recent fee publications for the Grayscale ETF.
Grayscale Ethereum ETF fee dumping!
As you have been following on Kriptokoin.com, the start of Ethereum ETF trading is just days away. Earlier this week, Grayscale announced its Ethereum ETF fee structure at a staggering 2.5%. This made it 10 times more costly than any of its competitors in the market. The move put Grayscale in a bad light, with analysts noting that the asset manager had not learned enough lessons despite exits from spot Bitcoin ETFs over the past six months.
As part of this course correction, Grayscale cut the fees on the Ethereum mini-trust to just 15 basis points. Furthermore, the asset manager announced a full fee waiver for inflows of up to $2 billion or six months, whichever comes sooner. Interestingly, this fee revision makes the Grayscale Ethereum mini trust the cheapest among all Ethereum ETF issuers currently on the market.
Nate Geraci praises Grayscale
ETF Store President Nate Geraci applauded Grayscale for undertaking this strategic shift and competing with other market players. Geraci said, “Bravo, Grayscale. This is how you go for the jugular.” Geraci also added that Grayscale paved the regulatory path for spot Bitcoin ETF and Ethereum ETFs. Therefore, there is no reason not to take advantage of this by taking a leadership position in the spot crypto ETF category, he added.
Ethereum ETF inflows and ETH price forecast
Analysts see Grayscale’s initial 2.5% fee as a strategic mistake. However, 60% of respondents to a Twitter poll believe that Ethereum’s price will rise 14 days after the ETF launch. According to analysts, however, there could still be a short price decline at the start.
Bloomberg ETF analyst Eric Balchunas predicts that the ETH ETF will attract 10 to 15% of Bitcoin assets. This is consistent with Hong Kong crypto ETFs, where ETH accounts for 60% of total assets under management (AUM). So, we’re talking about 15 to 16% of total ETF inflows going to ETH. In the five months since the launch of the Bitcoin ETF, nine BTC issuers have withdrawn $37 billion in assets under management. Assuming that ETH attracted 15% of that, that would translate to $5.6 billion. Currently, Grayscale holds $11 billion in ETH. Assuming that 53% will be sold by Grayscale trust holders, that would be $5.88 billion, which is close to the projected inflow of $5.6 billion. So, according to this analysis, the outflow would roughly equal the inflow.
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