Discount on Grayscale Ethereum Trust reduced to 1%

Alex Dovbnya

Will Grayscale reduce fees on its soon-to-launch Ethereum ETF to be more competitive?

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As noted by ETF analyst Nate Geraci, the Grayscale Ethereum Trust discount has dived at 1.45% after a peak of almost 50% in one year.

Such an astonishing development is due to the approval of a large number of Ethereum exchange-traded funds.

Just a month ago, the fund was trading at a discount of more than 20% to net asset value (NAV). However, the U.S. Securities and Exchange Commission reversed course by approving several Form 19b-4s. This sudden reversal shocked seasoned market observers who expected the SEC to cancel Ether ETF spot deposits and pave the way for a significant price rally in May.

However, it should be noted that these products have not yet started to be marketed since their approval is done in two stages. Now, the SEC must greenlight many S-1 filing forms. As reported by U.TodaySEC Chairman Gary Gensler said he expected the products to launch this summer without giving a more specific timetable.

Geraci recently suggested that final approval of Bitcoin ETF products could happen as soon as next week.

Earlier this week, potential ETF issuers, including BlackRock, Fidelity and Grayscale, submitted their files updated.

Will Grayscale reduce fees?

Grayscale’s GBTC has struggled to compete with other heavyweight ETFs like BlackRock and Fidelity due to its exorbitant fees, five times the average fee of other products (0.3%). Grayscale has refused to lower fees on its crown jewel despite massive releases.

While some think Grayscale might now lower fees in order to experience horrible cash outflows, Geraci doesn’t think that will be the case. The analyst predicted that Grayscale would wage the fee war via Ethereum Mini Trust.

Additionally, Geraci doesn’t expect Grayscale’s Ether ETF to see massive outflows: “I guess they’re decent outflows, but not as bad as we saw with GBTC.”

About the Author

Alex Dovbnya

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to this booming industry, from price analysis to blockchain disruption. Alex has authored over 1,000 articles for U.Today, CryptoComes and other fintech media. He is particularly interested in regulatory trends across the world that are shaping the future of digital assets. He can be contacted at alex.dovbnya@u.today.

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