Next Arc Research

Disclaimer: This content is for informational and educational purposes only and should not be construed as financial or investment advice. Always do your own research and consult a licensed financial advisor before making investment decisions.
Disclosure: The author holds a long position in ETH.
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ETH

Analysis as of: 2025-10-14
Grayscale Ethereum Mini Trust ETF
A U.S.-listed spot Ethereum exchange-traded product holding ETH with a 0.15% sponsor fee; now permitted to stake ETH and reinvest rewards.
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Summary

Low-fee ETH vehicle flips on staking
With staking now permitted and fees at 15 bps, the fund’s odds of compounding AUM improved as ETF rails mature and advisor access widens. Execution rests on winning share from larger distributors.

Analysis

Thesis
As the lowest-fee U.S. spot ETH ETP now enabled for on-chain staking, ETH can compound NAV and capture cost-sensitive flows as crypto ETF rails and options/liquidity deepen by 2030.
Last Economy Alignment
Owns attention/flow gateway to Ethereum and converts on-chain yield into brokerage-native exposure; leverages financialization and new ETF standards.

Growth Outlook

Average Implied Multiple (to 2030)
8.2x (from 3 most recent periods)
Reasoning
Treat EV as AUM. Current AUM ≈ 3,120. U.S. ETH ETP TAM expands from ~35,000 (2025) to ~250,000 (2030) aided by SEC generic listing standards, options market depth, and institutional allocation. As the low-fee, staking-enabled product, ETH’s share rises from ~9% to ~12%, implying AUM ≈ 30,000 and EV_2030/EV_2025 ≈ 9.6×.

Risk Assessment

Overall Risk Summary
Key risks: dominance by BlackRock/Fidelity distribution, fee wars compressing share, staking operations/slashing or liquidity sleeve constraints, single-custodian dependency, and policy shifts (staking, tax treatment, product standards). Cyclicality in ETH price and flows is the primary driver.