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Arkham Intelligence has shared notable insights into Grayscale Investment’s Ethereum (ETH) holdings.
Earlier this year, the US SEC approved eight asset managers, including Grayscale, to list spot Ethereum exchange-traded funds (ETFs).
Other asset managers approved to list Ethereum ETFs were BlackRock, Fidelity, VanEck, Ark21Shares, Invesco Galaxy, Bitwise and Franklin Templeton.
Grayscale dominance amid market challenges
Arkham data reveals that of these eight asset managers, Grayscale is the largest institutional owner of Ethereum.
According to the blockchain intelligence firm, Grayscale holds 1.935 million ETH worth $6.62 billion.
Analysts find the record interesting despite market dynamics seemingly against it.
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They noted that Grayscale has the highest transaction fee among the eight asset managers at 2.5%. This puts its transaction cost a significant 2.25% higher than the nearest asset manager.
In addition, Grayscale’s ETHE has seen massive outflows since its launch.
Data from Farside Investors shows that cumulative ETH outflows were $3.616 billion.
Despite this significant attrition, Grayscale still leads significant players like BlackRock and Fidelity. Both companies have consistently seen inflows in the Ethereum ETF market.
Spot Ethereum ETFs An arduous journey
The approval of the Spot Ethereum ETF, which allowed institutional investors to gain exposure to ETH, came after a long tussle by asset managers.
The US SEC delayed the filings for about a year from when the filings were first filed.
Despite the regulatory green light for the spot Bitcoin ETF in January 2024, the spot Ethereum ETF had to wait.
A significant concern of the US SEC at the time revolved around the issue of investing in Ethereum.
Specifically, the Ethereum blockchain allowed owners to lock up their funds as collateral to support network operations in exchange for rewards.
Also, SEC Chairman Gary Gensler’s silence on the status of Ethereum added to the concerns.
The SEC declined to clarify whether Ethereum passed as a security. However, Craig Salm, Grayscale’s chief legal officer, remained optimistic about the regulatory nod.
UX announcement, Salm emphasized that the issues that many feared could derail the approval were resolved before the approval of the spot Bitcoin ETF.
Final trading approval came in July 2024, and since then institutional investors have been trading the asset.
Ethereum ETF market impact
Cryptocurrency analysts predict that the approval of a spot Ethereum ETF could help the price of ETH rise.
Some expected a quick climb to $6,500 once the SEC approves.
Others remained cautious with their predictions, arguing that the Ethereum ETF may not have the same growth trajectory as the Bitcoin ETF.
A little more than five months later, analysts who were cautious in their predictions have been proven right.
The Ethereum ETF did not have the first-mover advantage of Bitcoin, which affected its growth trajectory.
However, the asset continued to see significant price growth, and in early December 2024, the Ethereum price reached $4,000.
The rise was the first since the asset soared in March.
As of this writing, the price of ETH was 3394.47, representing an increase of 1.17% in the last 24 hours. Market watchers expected the coin to breach its all-time high of $4,721.07 in 2021.
Only time will tell if ETF products will help achieve this goal.
