Grayscale's Legacy Assets Inflate Crypto ETF Launches
Crypto ETFs made headlines last week when they appeared to begin trading with $10.36 billion already inside them, sparking speculation about institutional buying. However, a closer look at the data reveals that most of this money came from existing assets held by Grayscale's older trusts.
According to Farside Investors' data, nearly all of the seed capital for Ethereum ETFs came from conversions of Grayscale's Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH). In fact, 98.7% of the $10.36 billion seed base was tied to these conversions.
The same issue appears in Solana funds, but on a smaller scale. Farside's data shows that $449.3 million of the opening balance came from seed positions, with Grayscale Solana Trust accounting for $102.7 million as a conversion.
Experts point out that counting all of this money as 'ETF demand' compresses inherited assets, launch financing, and later creations into one number, even though each describes a different transaction.