Since November 2021 it has consistently traded at a discount to market prices.
Grayscale has been fighting the SEC for approval into Exchange-traded funds (ETFs).
According to data provided by YCharts. The discount at which the Grayscale Ethereum Trust (ETHE) trades in relation to the price of Ethereum (ETH) is at an all-time high of 59.39%. Although the fund has historically traded at a premium to ETH. Since November 2021 it has consistently traded at a discount to market prices.
ETHE is managed by Grayscale Capital. One of the biggest institutional investors in the cryptocurrency industry. And it enables conventional investors to obtain exposure to Ethereum without actually purchasing the cryptocurrency.
Even GBTC Facing the Wrath
The fund, started the year with over $3.6 billion in AUM. Has lost about 68.37% of its value so far due to the general drop of ETH and other crypto assets. The Grayscale Bitcoin Trust (GBTC), Grayscale’s sibling fund, is experiencing similar difficulties.
According to YCharts, the current discount for GBTC shares compared to the price of Bitcoin is 45.17%, a modest increase from the record discount of 48.89% seen in mid-December. Although shareholders in funds have the option to sell their shares at any time, they do not have physical possession of the underlying cryptocurrency.
Since the beginning of June, Grayscale has been fighting the SEC for approval to transform its cryptocurrency funds into Exchange-traded funds (ETFs), which would allow them to be traded on public stock exchanges. This would greatly increase the funds’ liquidity.
The development comes as concerns persist over Grayscale and its parent firm, Digital Currency Group’s (DCG), financial stability.
Bitvavo, a Dutch cryptocurrency exchange, said in December that DCG has postponed reimbursements until this liquidity issue has been rectified because of experiencing liquidity challenges owing to the present instability in the crypto market.
