Crypto asset manager Grayscale has transferred $1 billion worth of Ethereum (ETH) to Coinbase Prime in preparation for the debut of Ether exchange-traded funds (ETFs) in the U.S. this week, according to blockchain data.
On July 22, Grayscale moved 10% of its Grayscale Ethereum Trust (ETHE) holdings, amounting to around 292,000 ETH, from its Coinbase hot wallet to the Grayscale Mini Trust. This significant transfer occurred just before the launch of the first batch of U.S.-based spot Ether ETFs on July 23, indicating that Grayscale is pre-seeding funds for the ETF launch.
Coinbase will serve as the custodian for eight out of the nine newly approved Ether ETFs, extending its role as a key custodian for cryptocurrency ETFs. Coinbase already powers 10 out of the 11 existing spot Bitcoin ETFs, as noted in a July 22 announcement.
The U.S. Securities and Exchange Commission (SEC) approved the final S-1 registration statements required for the Ether ETFs to launch on stock exchanges on July 22. The approved issuers include major investment firms such as BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy.
Grayscale’s Ethereum Trust will be listed on the New York Stock Exchange Arca (NYSE Arca), while BlackRock’s iShares Ethereum Trust will be listed on the Nasdaq. Notably, Grayscale’s Ether ETF has the lowest waiver fee among the new funds, set at 0.15%, according to Bloomberg ETF analyst James Seyffart.
Institutional interest in Ether has surged in anticipation of the ETF launch. A report by Eugene Cheung, head of institutions at Bybit, revealed that institutional investors have doubled their Ether exposure, increasing from 6.54% to 14.29%. In contrast, retail investor allocation has also risen, albeit more modestly, from 7.4% to 9.52%.
The market’s optimism around Ether ETFs is reflected in the cryptocurrency’s recent price movements. Ethereum’s price exceeded $3,500 on July 17, rebounding from a significant drop earlier in the month.
Grayscale’s strategic move and the broader institutional interest in Ether suggest a strong potential for growth in the crypto asset’s market. Analysts remain optimistic about the debut of Ether ETFs and their impact on the market, with some projecting a substantial increase in demand and price for Ethereum in the coming months.
