Grayscale, the company known for operating the world’s largest crypto funds, has announced its plan to convert its Grayscale Ethereum Trust (ETHE) into a spot Ethereum (ETH) exchange-traded fund (ETF). This move has already resulted in a 2.71% surge in ETHE shares on the day of the announcement.
Grayscale’s CEO, Michael Sonnenshein, stated that the conversion to an ETF would be the “final stage” of the planned lifecycle for the Ethereum Trust, which was launched in March 2019. The company aims to provide investors with transparent and regulated access to crypto through familiar product structures.
An ETF is a stock index that tracks the price of an underlying asset or a basket of assets, such as cryptocurrency. In the case of a spot Ethereum ETF, the fund would sell shares to investors, each backed by a fixed amount of ETH held by the fund or a custodian it partners with. Currently, ETHE shares are not easily redeemable for ETH, leading to discrepancies between their price and the value of the ETH that supports them. As of now, the fund holds over $5.1 billion worth of ETH compared to $3.6 billion in share value.
The existing share discount presents an opportunity for investors. If the fund’s conversion to an ETF is approved, the share value would be restored to parity with the fund’s assets, resulting in significant profits for existing holders.
Grayscale is the fifth company to file for an Ethereum ETF in the past month, following filings from Ark/21Shares, HashDex, VanEck, and Galaxy/Invesco. The company has previously attempted to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF but has faced continuous obstacles from the Securities and Exchange Commission (SEC). In August, Grayscale emerged victorious in a year-long lawsuit against the SEC, with the court ruling that the agency’s refusal to approve a spot ETF was “arbitrary and capricious.”
In addition to pursuing a spot Ethereum ETF, Grayscale has also filed for a futures Ethereum ETF. Futures ETFs are backed by cash-settled futures contracts rather than actual ETH, and their implications for the underlying asset’s price are seen as less bullish. Recently, several firms have applied for Ethereum futures ETFs, with Valkyrie’s ETF leading in Trading volume shortly after its launch. However, the opening volume of these ETFs is still much lower than that of ProShares’ Bitcoin Strategy ETF, which accumulated $500 million in volume on its first day in October 2021.
Overall, Grayscale’s move towards converting its Ethereum Trust into an ETF reflects the growing interest in and demand for crypto Investment products. The company’s success in obtaining SEC approval for a spot ETF would likely have a significant impact on the crypto Market and generate substantial profits for investors..
#Grayscale #Files #Convert #Major #Trust #ETF
Grayscale’s CEO, Michael Sonnenshein, stated that the conversion to an ETF would be the “final stage” of the planned lifecycle for the Ethereum Trust, which was launched in March 2019. The company aims to provide investors with transparent and regulated access to crypto through familiar product structures.
An ETF is a stock index that tracks the price of an underlying asset or a basket of assets, such as cryptocurrency. In the case of a spot Ethereum ETF, the fund would sell shares to investors, each backed by a fixed amount of ETH held by the fund or a custodian it partners with. Currently, ETHE shares are not easily redeemable for ETH, leading to discrepancies between their price and the value of the ETH that supports them. As of now, the fund holds over $5.1 billion worth of ETH compared to $3.6 billion in share value.
The existing share discount presents an opportunity for investors. If the fund’s conversion to an ETF is approved, the share value would be restored to parity with the fund’s assets, resulting in significant profits for existing holders.
Grayscale is the fifth company to file for an Ethereum ETF in the past month, following filings from Ark/21Shares, HashDex, VanEck, and Galaxy/Invesco. The company has previously attempted to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF but has faced continuous obstacles from the Securities and Exchange Commission (SEC). In August, Grayscale emerged victorious in a year-long lawsuit against the SEC, with the court ruling that the agency’s refusal to approve a spot ETF was “arbitrary and capricious.”
In addition to pursuing a spot Ethereum ETF, Grayscale has also filed for a futures Ethereum ETF. Futures ETFs are backed by cash-settled futures contracts rather than actual ETH, and their implications for the underlying asset’s price are seen as less bullish. Recently, several firms have applied for Ethereum futures ETFs, with Valkyrie’s ETF leading in Trading volume shortly after its launch. However, the opening volume of these ETFs is still much lower than that of ProShares’ Bitcoin Strategy ETF, which accumulated $500 million in volume on its first day in October 2021.
Overall, Grayscale’s move towards converting its Ethereum Trust into an ETF reflects the growing interest in and demand for crypto Investment products. The company’s success in obtaining SEC approval for a spot ETF would likely have a significant impact on the crypto Market and generate substantial profits for investors..
#Grayscale #Files #Convert #Major #Trust #ETF
