Grayscale has decided to convert its ethereum Trust (ETHE) into a spot exchange-traded fund (ETF).
On October 2 ethereum-Trust-to-an-ETF.html”>statementThe crypto asset investment product said the New York Stock Exchange’s Arca filed Form 19b-4 with the US Securities and Exchange Commission (SEC) to convert its Ether Trust into a spot ETF.
The filing comes on the heels of the SEC’s approval of several ethereum futures ETFs.
Grayscale CEO Michael Sonnenshein said the move further indicated the company’s “unwavering commitment to offering investors transparent, regulated access to cryptocurrencies through familiar product structures.” He added:
“As we file to convert ETHE into an ETF, the natural next step in the product’s evolution, we recognize this is an important moment to bring ethereum further into the US regulatory perimeter.”
Grayscale ethereum Trust launched in March 2019 and has grown to become one of the largest Ether investment vehicles in the world. According to its website, the fund’s assets under management amount to approximately $5 billion, representing 2.5% of all Ether in circulation.
Meanwhile, Grayscale recently scored a historic victory over the SEC over the regulator’s reluctance to approve the transition of its Grayscale bitcoin Trust (GBTC) to an ETF.
ETHE Discount
Like GBTC, Grayscale’s ETHE trades at a significant discount to net asset value (NAV), currently around 31%, according to Coinglass. data.
ETHE’s discount peaked near 60% in January and has generally remained between 40% and 50% for most of the year. However, the metric began a significant decline after BlackRock filed its application for a bitcoin spot ETF in June. The decline continued, hitting its lowest level in a year, following Ark Invest’s filing for an ethereum spot ETF in early September.
Currently, Grayscale’s ETHE setup does not support swaps, a contributing factor to its trading discount. However, the proposed transition from a trust to an ETF, which inherently allows for share redemption, could potentially eliminate this discount.
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