Grayscale has transferred 292,262 ETH, or over $1 billion, to Coinbase Prime. The transaction comes as spot Ethereum ETFs have just launched, reminiscent of the large outflows from the spot Bitcoin ETF earlier this year.
$1 Billion Moved to Coinbase Prime
In May 2024, the Securities and Exchange Commission (SEC) approved Ethereum spot ETFs. Their launch, requiring a few months of additional preparation, takes place today, Tuesday July 23..
These new financial products echo the Bitcoin spot ETFs launched in January 2024, which have met with great success.
In the first few weeks, BTC-based ETFs saw significant inflows across almost all funds, except Grayscale's GBTC, which was not a new asset, but a transition from a Bitcoin Trust.
Several factors, including a decorrelation in the price of GBTC several months earlier, caused GBTC investors to take profits, creating significant outflows from Grayscale's ETF. The Ethereum Trust, ETHE, having suffered a similar downgrade, is expected to suffer the same fate..
💵 How to invest in an Ethereum spot ETF?
So, on the night from Tuesday to Monday, On-chain analysis revealed that Grayscale transferred 292,262 ETH, worth $1 billion, to Coinbase Primethe platform dedicated to professionals.
At first glance, one might think that this transfer was made in anticipation of the expected massive sell-off on ETHE. However, a few hours later, All of the funds returned from Coinbase to Grayscale, distributed across 20 different addresses in tranches of approximately 15,000 Ether, or $50 million per tranche.
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Why did the 292,000 ETH return to Grayscale?
It seems like All of the Ethers initially transferred to Coinbase have been transferred back to Grayscale and integrated into its Ethereum spot mini ETFsoberly called “ETH”.
Unlike ETHE, this mini ETF is designed to be a more attractive asset. It aims to hold 10% of ETHE’s Ethers, with 0% fees from launch, then 0.15% after 6 months, making it the lowest-cost Ethereum-based ETF on the market.
On the other hand, Grayscale's Ethereum Spot ETF to Start with Market-High Fee of 2.5%.
A mini ETF has also been announced on Bitcoin. This mechanism was designed to try to cushion capital outflows from Grayscale and maintain a larger market share..
Indeed, without this mini ETF, GBTC lost more than half of its Bitcoins under management, going from 617,000 BTC to 270,000 today.
📰 Also read in the news – $970 million worth of BNB was destroyed in the 28th quarterly burn
Regarding the performance of spot Ethereum ETFs, several analysts believe that they should welcome, During the first 18 months, about half of the net inflows recorded by Bitcoin spot ETFs, or about 15 billion dollars.
In just 6 months, US spot Bitcoin ETFs have accumulated over 900,000 BTC under management and over $17 billion in net inflows.
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Source: Etherscan, Arkham
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I have no choice but to share my knowledge and transmit the passion I have for the blockchain universe. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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