Crypto ETF Launches Mask True Nature of Market Activity

Crypto exchange-traded funds (ETFs) launched in the US have seen significant assets injected into them, but an examination of the filing data reveals that much of this money came from existing pools.

The Ethereum ETFs appeared to begin trading with $10.36 billion already inside them, a sum large enough to resemble an institutional buying wave. However, almost all of this amount, approximately 98.7%, came from Grayscale's older trusts, specifically the Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH). This indicates that existing assets were transferred into the new ETF structure rather than a massive influx of new money.

The same accounting issue appears in Solana funds, but on a smaller scale. Farside Investors listed $449.3 million on the products' seed row and assigned $102.7 million to the conversion of Grayscale's earlier Solana trust, GSOL.