On July 22, Grayscale, a leading digital asset manager, transferred $1 billion worth of Ether to Coinbase. This significant move aligns with the company’s preparations for the anticipated launch of spot Ether exchange-traded funds (ETFs) in the United States. This event marks a major development in the integration of cryptocurrency into mainstream financial products.
Blockchain data indicated that about 10% of the 292,000 Ether, equivalent to a market value of $3,447 per ETH, was subsequently moved from the Coinbase hot wallet to the Grayscale Mini Trust, identified by wallet address “0xab3.” This activity was reported on July 23 by iChaininfo, a data provider on the X platform.
The billion-dollar transfer underscores Grayscale’s strategy to seed funds in anticipation of the launch of the first batch of U.S.-based spot Ether ETFs, set to begin trading on July 23. This move is seen as a pre-emptive step to ensure liquidity and stability when these ETFs become publicly tradable.
Coinbase’s Custodial Role
Coinbase, a major player in the cryptocurrency exchange market, has been selected as the custodian for eight of the nine newly approved Ether ETFs. This role builds on its existing responsibilities as custodian for the majority of the existing spot Bitcoin ETFs.
On the regulatory front, the U.S. Securities and Exchange Commission (SEC) approved the final S-1 registration statements on July 22, clearing the way for the ETFs to be listed and traded on stock exchanges. The issuers of these Ether ETFs include notable financial institutions such as BlackRock, Fidelity, and others.
Listing and Fees
The Grayscale Ethereum Trust is set to be listed on the New York Stock Exchange Arca (NYSE Arca), while the BlackRock-issued iShares Ethereum Trust will find its home on the Nasdaq. Notably, Grayscale’s offering boasts the lowest waiver fee among its peers at just 0.15%. Additionally, the Grayscale Ether ETF will feature zero fees for the first six months of trading to attract initial investment.
In the lead-up to the ETF launch, institutional investors have shown a marked increase in their Ether holdings, indicating a strong bullish sentiment. According to Eugene Cheung from Bybit, institutional interest in Ether surged from 6.54% to 14.29% following the ETF announcement, while retail investor allocation also increased.
The burgeoning interest in Ether, fueled by the new ETFs, could significantly impact its market price. Bybit’s Cheung expressed optimism about Ether’s price trajectory, predicting a potential doubling within the next 18 months. This comes even as Ether remains 28% below its all-time high of over $4,800 reached in November 2021.
| Date | Event | Details |
|---|---|---|
| July 22 | ETH Transfer to Coinbase | $1 billion worth of Ether transferred |
| July 22 | SEC Approves ETF Registration | Final S-1 statements approved for ETF launch |
| July 23 | Ether ETF Trading Commences | Launch of U.S.-based spot Ether ETFs |
| July 23 | Additional Transfer to Mini Trust | 10% of transferred ETH moved to Grayscale Mini Trust |
| Ongoing | Institutional and Retail Investment Growth | Increase in Ether exposure among investors |
Grayscale’s strategic transfer of Ether to Coinbase represents a pivotal moment in cryptocurrency’s integration into traditional financial markets. As these new ETFs begin trading, they promise to bring increased liquidity and broader acceptance of Ether as a legitimate investment vehicle.
Featured image credit: Kanchanara via Unsplash
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