Grayscale Leads, Will BlackRock Topple Grayscale?

According to WSJ data and based on the EUR exchange rate, over $1 billion in shares of newly-listed ether ETF issuers changed hands for investors. Trading volume is the amount of dollars exchanged for shares, not whether these trades were inflows or outflows. It also remains to be seen whether investments were guided by a view to the long term or, for example, opportunities they offered short-term arbitrage trades. For instance, spot bitcoin ETFs – such as the ones trading in Toronto and New York last year – volume was reported at $4.5 billion on Day 1, but inflows amounted to only about $600 million. 

The single most-traded security on the first day was Grayscale’s Ethereum Trust (ETHE), with a cumulative trading volume of almost $458 million. Next was BlackRock with its iShares Ethereum Trust (ETHA), which saw a trading volume of $243 million. The spot bitcoin ETFs witnessed drastically larger trading volumes upon their initial day of release. Specifically, the spot bitcoin ETFs jointly amassed over $6.6 billion in holdings within three weeks of commencing trades. Such widespread tradability highlighted the diverse usage for new trading pairs among different trader types, illustrated in depth, showcasing how there are many ways and reasons that investors engage with financial instruments within cryptocurrencies.

BlackRock’s iShares Ethereum Trust (ETHA) launched with a splash and is already ranked among the top 50 ETF launches. This divergence signals promising prospects for BlackRock in the Ether ETF space, such as surpassing Grayscale’s recent dominance of the Bitcoin space. Supported by enormous cash infusions and signs of faith from investors, BlackRock’s Inaugural Bitcoin Fund (IBIT) proved able to outpace Grayscale’s Bitcoin Trust (GBTC) in merely a few months. Nonetheless, BlackRock must foster high trade volumes and ongoing enthusiast backing and leverage its market power and assets – alongside other variables – to attract further institutional money for any forthcoming ether ETFs. With that premier position, BlackRock’s ETHA could surpass Grayscale’s Ethereum Trust (ETHE). Will BlackRock continue sweeping past Grayscale and reshape the ether ETF ecosystem?