Grayscale Ethereum Trust Trading at 515% Premium

Published at: April 10, 2020

Investors are paying a 515% premium to buy Ether through the Grayscale Ethereum Trust.

It costs $90.55 to buy a share in Grayscale Investments’ Ethereum Trust (ETHE), however its Ether holdings per share are currently worth just $16.10. That means it’s five times more expensive to buy Ether via the trust than on the open market.

04/09/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.Total AUM: $2.5 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/S68eNk8tEN

— Grayscale (@GrayscaleInvest) April 9, 2020

While the ETHE premium goes up and down regularly, it is now significantly higher than the 220% it was reported at in February. The gap was even wider — 1,150% — when ETHE first started trading in OTC markets in June 2019.

After passing $1 billion in investments for 2019, Grayscale’s Ethereum Trust currently has $195.1 million in assets under management. The market price is up 238% over the past three months while its Ether holdings are up 22% over the same period. However they are down almost 7% over the past 12 months, and 78% since inception.

Paying premiums to avoid taxes and regulations

The ETHE trust is targeted at investors willing to pay more for regulatory oversight and to avoid risk. Anyone thinking about a potential arbitrage opportunity, however, should note all ETHE shares require a one-year holding period after they’re created. In addition, the trust requires all investors to be accredited, with a minimum of $25K to start.

Grayscale Bitcoin Trust still considered 'digital gold'

The United States-based investment firm also offers a trust for other large cryptocurrencies, including Bitcoin (BTC). The Grayscale Bitcoin Trust is the firm’s largest holding, with over $2 billion in assets under management. 

The Grayscale Bitcoin Trust is a considerably buy than its Ethereum Trust, with $7.04 worth of Bitcoin holdings per share, which trade for just $7.80 each. Its Bitcoin holdings have increased in value by almost 5000% since inception.

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