On July 22, Grayscale executed a monumental transfer of $1 billion in Ether to Coinbase, signaling a strategic maneuver in preparation for the forthcoming launch of spot Ether exchange-traded funds (ETFs) in the United States, as revealed by blockchain data.

Following this transfer, roughly 10% of the 292,000 Ether was reallocated from Coinbase’s hot wallet to the Grayscale Mini Trust, identified as wallet “0xab3,” as reported by data provider iChaininfo in a July 23 X post. This substantial financial movement occurred just one day prior to the debut of the first tranche of US-based spot Ether ETFs, commencing trading on July 23. This significant pre-launch transfer indicates Grayscale’s readiness for the ETF rollout.

Coinbase will serve as the custodian for eight out of the nine newly approved Ether ETFs. The exchange currently manages the custody of 10 out of 11 existing spot Bitcoin ETFs.

SEC Greenlights Ether ETFs

On July 22, the US Securities and Exchange Commission (SEC) granted final approval for the S-1 registration statements required for the ETFs to commence trading on stock exchanges. The approved Ether ETF issuers include industry giants such as BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy.

Grayscale’s Ethereum Trust is set to be listed on the New York Stock Exchange Arca (NYSE Arca), while BlackRock’s iShares Ethereum Trust will debut on Nasdaq. Notably, Grayscale’s Ethereum Trust has been marked by the lowest waiver fee among the issuers at 0.15%, according to James Seyffart, an ETF analyst at Bloomberg.

Institutional Interest Could Drive Ether Prices Higher

In the week leading up to the ETF launch, institutional investors demonstrated a more optimistic outlook on Ether compared to retail investors. Eugene Cheung, head of institutions at Bybit, shared with Cointelegraph:

“Our recent analysis indicates that institutional investors are markedly more bullish on ETH than their retail counterparts.”

Institutional holdings of Ether surged from 6.54% to 14.29% following the ETF announcement, while retail investor allocations increased from 7.4% to 9.52%, reflecting a measured optimism towards Ether’s price trajectory. According to Cheung, the burgeoning institutional interest could potentially propel Ether’s price to double within the next six months. He remarked:

“I am confident in ETH’s long-term prospects, forecasting a doubling in value over the next 18 months, offering an attractive risk/reward scenario for potential investors.”