Spot Ethereum ETFs, which received initial approval from the SEC at the end of May, will open for trading today. As the awaited day has finally arrived, Grayscale, one of the ETF issuers, moved $1 billion worth of ETH to Coinbase last night.
While this transfer of Grayscale attracts attention, investors are wondering “are they going to sell?” he started to think. However, experts think that the transfer is not a sale.
Speaking to Decrypt, Jon Campagna, manager of crypto hedge fund company Nexyst Digital, stated that this transfer was not for sales purposes.
While there was speculation in the market that Grayscale might sell ETH to invest in other cryptocurrencies such as Solana (SOL), Campanga said that this transfer was from the Grayscale Ethereum Trust (ETHE) to the Grayscale Ethereum mini ETH ETF.
Recalling that Grayscale allocated 10% of ETHE assets for the new ETF, Campagna said on July 18:
“The sale does not make sense. On July 18, Grayscale allocated 10% of ETHE assets for the new ETF. On that day, they said that those who own ETHE will be able to receive 10 percent of their assets when the ETF opens for trading. ETHE has an asset value of $10 billion 10% of this is equivalent to $1 billion. Therefore, this ETH transfer was made in preparation for ETH ETFs.
“They don't sell ETH, they don't buy Solana.”
Campagna stated that there will be outflows from the Grayscale Ethereum Trust due to high transaction fees, but these outflows will shift to other ETFs, especially Grayscale's mini-Ethereum fund.
According to Bloomberg senior ETF analyst Eric Balchunas, this transfer of Grayscale is not a sale but a transition from Grayscale Ethereum Trust to Grayscale Ethereum mini ETH ETF.
Following a similar process in Spot Bitcoin ETFs, Grayscale also made large Bitcoin (BTC) transfers after the launch of BTC ETFs.
*This is not investment advice.