Grayscale Moves $1 Billion in Ethereum Ahead of ETF’s Initial Issuance Is It to Dump the Asset or Pave the Way for the Issuance?

Grayscale has moved a significant $1.01 billion in Ethereum to Coinbase Prime, anticipating the launch of Ethereum exchange-traded funds (ETFs) in the U.S. this week.

Grayscale's large transfer sparks suspicion

This transaction sparked speculation that Grayscale might sell off Ethereum to invest in other cryptocurrencies like Solana.

However, Jon Campagna of Nexyst Digital dispelled these rumours, affirming Grayscale's commitment to Ethereum.

On July 18, Grayscale allocated 10% of its Ethereum Trust (ETHE) holdings to a new Ethereum ETF.

This fund is set to go live soon, with ETHE holders receiving equivalent ETF shares.

Campagna mentioned that Grayscale moved $1 billion, representing 10% of their $10 billion assets under management (AUM) in ETHE, to Coinbase Prime.

This strategic move might drive more assets to the lower-cost ETF, which carries a 15 basis point fee.

Fee Structure Controversy

Despite the launch, Grayscale plans to maintain a 2.5% fee on ETHE, significantly higher than the competition. This fee structure has sparked discussions among analysts like Eric Balchunas of Bloomberg, who noted the high costs.

Regulatory Approval

The Securities and Exchange Commission (SEC) approved the S-1 registration statements of spot Ethereum ETF issuers on Monday, making it the second digital asset ETF to go live in the US, according to the latest filings on its website.

The approval is also visible across the websites of the various asset managers that applied for the product.

Ethereum's Market Performance

As Grayscale and other major firms like BlackRock and Fidelity prepare to launch their Ether ETFs, Ethereum's price has been climbing, recently surpassing $3,500.

While Wintermute has hinted at lower-than-expected demand for Ethereum ETFs, analysts remain positive. Matt Hougan of Bitwise Asset Management predicts Ethereum could reach $5,000.

Eth price trend in the past week Source: coinmarket