Grayscale Ethereum Trust Discount Shrinks to 1%

Grayscale Ethereum Trust is experiencing a notable shift, with its discount shrinking to just 1% from a high of nearly 50% over the past year. This change can be attributed to the recent approval of numerous Ethereum exchange-traded funds (ETFs). Previously, the fund had been trading at a discount of over 20% to its net asset value (NAV). However, the U.S. Securities and Exchange Commission surprised market observers by approving several 19b-4 forms, leading to an anticipated price rally in May. It’s important to mention that these ETFs have yet to start trading, as their approval involves a two-step process, with the SEC needing to green-light S-1 registration forms. According to SEC Chair Gary Gensler, the products are expected to launch this summer. ETF analyst Nate Geraci also suggests that final approval for Bitcoin ETF products could occur as soon as next week. Despite the challenging competition from other ETFs with lower fees, Grayscale’s GBTC has refused to reduce its fees, which are five times higher than the average fee for similar products. This decision has contributed to significant outflows. However, Geraci believes that Grayscale may engage in a fee war through its Ethereum Mini Trust rather than lowering fees for its flagship product. Additionally, Geraci expects that Grayscale’s Ether ETF will experience some outflows but not to the extent seen with GBTC.