Surprising the markets, the U.S. Securities and Exchange Commission (SEC) granted approval to eight spot Ethereum ETF funds on May 23, initiating a process of optimism. Despite the approval, Ethereum's price displayed minimal reaction to this event. Preceding the SEC's announcement, Ethereum's price stood at $3,742, showing a marginal increase to $3,859 by May 28. The days leading up to the approval witnessed Ethereum's value surge by almost one-third. However, concerns regarding Grayscale's $11 billion Ethereum Trust (ETHE) emerged due to indications that the SEC might reverse its decision, impacting price movements significantly.

Balancing substantial inflows, Grayscale observed notable outflows from its Bitcoin Trust (GBTC) over several months, sparking concerns about a potential recurrence in Ethereum Trust. Following the approval of spot Bitcoin ETF funds, GBTC experienced an outflow of $6.5 billion within a month, equivalent to 23% of its assets under management (AUM). A report by Kaiko Research on May 27 projected that if historical trends repeat, the daily outflow from ETHE could reach $110 million.

Toni Mateos, the co-founder of LAOS Network, a platform facilitating asset creation on Ethereum Virtual Machine-compatible chains, anticipates significant outflows from ETHE. Mateos underlines the high liquidity and low fees of ETF funds, expecting substantial transfers from Grayscale Ethereum Trust to the new ETF due to more accessible entry barriers and reduced fees. Comparing GBTC and ETHE, Mateos notes a distinction in their significance for the respective markets. When spot Bitcoin ETF funds were approved, GBTC held around $30 billion in Bitcoin, amounting to 3.5% of Bitcoin's market value, whereas ETHE managed $11 billion in Ethereum, representing 2.2% of the market value. Thus, Mateos suggests that outflows from ETHE to new ETFs may be confined, rendering the ETF's impact more significant compared to the Bitcoin scenario.