Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Grayscale, the company behind the world’s largest crypto funds, has filed to convert its Grayscale Ethereum Trust (ETHE) into a spot Ethereum (ETH) ETF.
Following the announcement, ETHE shares rose 2.71% on the day.
Grayscale’s Pivot to Ethereum
In a press release, Grayscale CEO Michael Sonnenshein stated that the conversion to an ETF would mark the “final stage” of the Ethereum Trust’s planned lifecycle since its launch in March 2019.
“At Grayscale, our unwavering commitment is to offer investors transparent and regulated access to crypto through product structures that are familiar,” Sonnenshein said.
An exchange-traded fund (ETF) is a stock index that tracks the price of an underlying asset or basket of assets, such as cryptocurrency. A spot Ethereum ETF would allow investors to buy shares backed by a fixed amount of ETH held by the fund or a partnering custodian.
In its current form, ETHE shares are not easily redeemable for ETH, creating a discrepancy between the share price and the value of the underlying ETH. Based on current prices, the fund holds over $5.1 billion worth of ETH against a share value of just $3.6 billion.
Related Posts
This discount presents a significant opportunity for investors: if the fund’s conversion to an ETF is approved, share values are expected to align with the fund’s assets, generating substantial profits for existing holders.
Grayscale is the fifth firm to file for a spot Ethereum ETF in the past month, following applications from Ark/21Shares, HashDex, VanEck, and Galaxy/Invesco.
Grayscale has long sought to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, facing repeated delays from the Securities and Exchange Commission (SEC). In August, Grayscale won 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.”
Futures Ethereum ETFs
Last month, Grayscale also filed for a futures Ethereum ETF, joining over a dozen other firms that have applied for such products in recent months. Futures ETFs are backed by cash-settled futures contracts rather than actual ETH, and are generally viewed as having less bullish implications for the underlying asset’s price.
The first set of futures ETH ETFs launched on Monday, with Valkyrie’s ETF leading in trading volume within hours of opening. However, their opening volume was significantly lower than that of ProShares’ Bitcoin Strategy ETF in October 2021, which recorded $500 million in volume in a single day.
SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
