Grayscale Ethereum Ethereum
-5.15%
With the launch of the spot Ethereum exchange-traded fund (ETF) in the United States, the Trust (ETHE) will no longer trade at a discount to its net asset value (NAV).
According to YCharts data, ETHE, which has been trading at a discount for the past three years, reached a premium of 0.31% to NAV on July 3, ahead of the Independence Day holiday.
The premium or discount to NAV indicates how much higher or lower the market price of each stock is relative to the value of the ether it represents.
The ETHE discount rate has been decreasing since the crypto bear market bottom in December 2022, as speculation grew surrounding the launch of a Bitcoin counterpart in January, followed by the approval of a spot Ethereum ETF by the U.S. Securities and Exchange Commission.
Despite widening again between March and May, the ETHE discount has narrowed dramatically since the SEC approved eight Form 19b-4s for spot Ethereum ETFs on May 23 from BlackRock, Fidelity, Bitwise, VanEck, Ark Invest, Invesco, Franklin Templeton, and Grayscale.
However, the issuer must make its S-1 registration statement effective before trading can commence, which is expected to happen in the coming weeks, but ETHE has so far traded at a slight discount to its NAV.
ETHE discount to NAV. Image: YCharts.
The Ethereum Bitcoin Trust previously traded at a discount because the shares are currently non-redeemable, meaning that the only option for shareholders is to sell their shares to other potential buyers. However, historically, it traded at a premium until the crypto credit crisis of 2021.
The discounted closing price suggests that the launch of a spot Ethereum ETF is imminent, with investors likely buying discounted shares ahead of the Ethereum Trust’s potential ETF conversion, similar to what happened with Grayscale Bitcoin Trust (GBTC) before it converted to an ETF in January.
According to Grayscale, ETHE currently has $9.5 billion in assets under management.
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