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 (ETF).
Other asset managers approved for the Ethereum ETF listing were BlackRock, Fidelity, VanEck, Ark21Shares, Invesco Galaxy, Bitwise, and Franklin Templeton.
Grayscale’s Dominance Amid Market Challenges
Data from Arkham reveals that of these eight asset managers, Grayscale is the largest institutional holder of Ethereum.
According to the blockchain intelligence firm, Grayscale owns 1.935 million ETH worth $6.62 billion.
GRAYSCALE IS THE LARGEST INSTITUTIONAL HOLDER OF ETH
THEY HAVE $6.62 BILLION OF ETH pic.twitter.com/WR8jHCsaAF
— Arkham (@arkham) December 30, 2024
Analysts consider the record interesting despite the market dynamics seemingly stacked against it.
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They noted that Grayscale has the highest transaction fee among the eight asset managers at 2.5%. This places its transaction cost a significant 2.25% higher than the closest asset manager.
Additionally, Grayscale’s ETHE has experienced massive outflows since its launch.
Farside Investors data shows the cumulative outflows amounted to $3.616 billion worth of ETH.
Despite this substantial outflow, Grayscale still leads notable players like BlackRock and Fidelity. Both firms consistently record inflows in the Ethereum ETF market.
Spot Ethereum ETFs Tortuous Journey
Spot Ethereum ETF’s approval, which allowed institutional investors to gain exposure to ETH, came after a long hassle by the asset managers.
The U.S. SEC delayed the applications for about a year from the time the applications were first filed.
Despite giving the regulatory green light for spot Bitcoin ETF in January 2024, spot Ethereum ETF had to wait.
A notable concern for the U.S. SEC at the time revolved around the issue of staking on Ethereum.
Notably, the Ethereum blockchain allowed holders to lock up their funds as collateral to support network operations in exchange for rewards.
Also, the SEC Chair Gary Gensler’s silence on the status of Ethereum added to the concerns.
The SEC had refused to clarify whether Ethereum passed as a security. However, Craig Salm, Grayscale’s Chief Legal Officer, remained optimistic about a regulatory nod.
In an X post, Salm emphasized that the issues many feared could derail the approval were resolved before the approval of spot Bitcoin ETF.
The final approval for trading came in July of 2024, and since then, institutional investors have traded the asset.
Ethereum ETF Impact on the Market
Cryptocurrency analysts projected that approving spot Ethereum ETF could help fuel a price rally for ETH.
Some anticipated a rapid climb to $6,500 once the SEC grants approval.
Others remained cautious with their predictions, maintaining that Ethereum ETF might not witness the same growth trajectory as Bitcoin ETF.
A little over five months later, analysts who were guarded in their predictions have turned out right.
Ethereum ETF did not have the first-mover advantage like Bitcoin, which has impacted its growth trajectory.
However, the asset still posted significant price growth, and in early December 2024, Ethereum price hit $4,000.
The climb marked the first time since the asset soared high in March.
As of this writing, ETH price was exchanging hands at 3,394.47, representing a 1.17% increase in the last 24 hours. Market observers had anticipated the coin would breach its all-time high of $4,721.07 in 2021.
Only time will tell if the ETF products will help it achieve this goal.
