Just this week, Grayscale’s $32 billion Bitcoin Trust (GBTC) was trading at a discount for the first time in over five years after trading at a premium. Following the steps of GBTC, its Ethereum Trust is also trading at a discount since its opening in 2017. The Grayscale Ethereum Trust currently holds 3.17 million ETH, with over 2.7% of the circulating supply of Ether.
Shares of Grayscale Ethereum Trust (ETHE) are getting crushed. The investment product under the symbol ETHE traded at a 5.2% discount on Feb. 25. By contrast, it normally trades at a premium of above 5%.
Grayscale investors seem to be backing off on the Ethereum purchase. This might be probably due to the price of ETH falling down by about 35% from $2,050 to a brief low of $1,360. At the time of writing, Ether is currently trading at $1,506.
Meanwhile, the valuation of ETHE premium also seems to have dropped to as low as $17 per share. Each share now roughly amounts to 0.01 ETH. In contrast to this, ETHE was trading as much as $23 in December.
The Grayscale Ethereum Trust is an investment product that takes investor's fiat money to buy Ether. However, instead of the investors actually receiving the Ether, Grayscale holds it on their behalf and issues shares that track the price of ETH.
Investors are more attracted to such investment vehicles as the trust is a regulated product with Grayscale holding accountability for the risks associated with it. In return, Grayscale charges its investors an annual fee of 2.5%.
Earlier this week, Grayscale Ethereum Trust (ETHE) bought more than 31,500 ETH, as per the latest filing with the U.S. Securities and Exchanges Commission.
The filing read:
“The Trust issued 3,077,800 Shares for an aggregate of 31,587.51268272 Ethereum representing $58,676,893. As a result, there are 307,601,300 Shares issued and outstanding as of February 23, 2021.”
This still comes as slightly lower than its previous purchase of about $100 million worth of ETH a week.