ETF Launch Figures Falsely Inflated by Existing Assets

Crypto exchange-traded funds (ETFs) appeared to make a splash on their launch day, with reported assets of $10.36 billion in just hours. However, a closer look at the data reveals that most of this money came from existing holdings rather than new investments.

The ETFs in question are for Ethereum, and according to Farside Investors, almost all of the seed capital came from Grayscale's older trusts, specifically the Grayscale Ethereum Trust (ETHE) and the Ethereum Mini Trust (ETH). This means that the launch moved existing assets into exchange-traded products rather than attracting new buyers.

This is not an isolated incident. Similar accounting issues were found in Solana funds, where Farside Investors listed $449.3 million on the seed row and assigned $102.7 million to the conversion of Grayscale's earlier Solana trust.