Grayscale prepares for spot Ethereum ETFs launch with $1 billion

Yesterday, Grayscale transferred 292,000 ETH worth $1 billion to Coinbase ahead of the opening bell today, which is when the ETFs will go live.

Coinbase will act as the custodian for eight out of nine of these newly approved Ethereum ETFs. So this transfer is basically Grayscale making sure there’s enough liquidity and everything’s ready to go when trading starts.

Grayscale’s Ethereum ETF charges a management fee of 2.5%. Compare this to some competitors, like BlackRock and Fidelity, who are offering fees as low as 0.19% to 0.25%. That’s a big difference and could affect where investors decide to put their money.

There are already some rumblings that these high fees might cause a short-term sell-off, as investors look for cheaper options. Grayscale’s ETHE is currently the biggest Ether-based exchange-traded product in the world, with $9.19 billion worth of ETH in its holdings. 

It also charges a 2.5% management fee. Meanwhile, the Grayscale Ethereum Mini Trust (ETH) is waiving fees for the first six months or until it hits $2 billion in net assets. John Hoffman, Grayscale’s managing director, reportedly said that: 

“ETH and ETHE will allow investors to invest in Ethereum’s potential to create markets, transform financial systems, utilize DeFi, and drive innovation through the trusted ETP wrapper — without the need to buy, store, or manage Ethereum directly.”

So what does this mean for the market? The launch of these spot Ethereum ETFs by Grayscale is likely to shake things up. Or not. Got to wait and see. For now, the ETFs are on NYSE Arca, which is NYSE’s electronic communications network (ECN) used for matching orders.