See More

Grayscale Ethereum Trust Discount Narrows to 1-Year Low Amid ETF Applications Surge

2 mins
Updated by Bary Rahma
Join our Trading Community on Telegram

In Brief

  • Grayscale Ethereum Trust has experienced a substantial reduction in its discount, reaching its lowest point in the past year at 26.64%.
  • The discount follows a surge in applications for the first spot Ethereum exchange-traded fund (ETF) in the United States.
  • Bloomberg's ETF expert James Seyffart expects a surge in the number of applications before the US Securities and Exchange Commission (SEC).
  • promo

Over the past year, the discount to the net asset value (NAV) for the Grayscale Ethereum Trust has reached its narrowest point. Intriguingly, this comes on the heels of applications for what might become the United States’s premier spot Ethereum exchange-traded fund (ETF).

According to YCharts, the discount now hovers around 26.64%. To put this into perspective, the last time it was this close was September 2022, with a 24.53% NAV discount.

Why the Grayscale Ethereum Trust Discount Narrows

Earlier in the year, the crypto industry faced upheaval with the collapse of multiple crypto-centric firms. This turmoil saw the NAV discount soar to a staggering 60%.

But this began to change in July. With BlackRock at the helm, mainstream financial giants proposed a spot Bitcoin ETF, with the discount during that period oscillating between 36% and 46%.

Read more: When Are Ethereum Gas Fees Lowest?

Grayscale Ethereum Trust Discount
Grayscale Ethereum Trust Discount. Source: YCharts

Moreover, the SEC’s recent deluge of Ethereum futures ETF applications in early August has kindled hope for an Ether ETF’s approval. Couple that with pivotal moves from ARK Invest and 21Shares towards the US’s potential first spot ETH ETF, and the shrinking of the NAV discount becomes more understandable.

Interestingly, Cboe’s submission has tapped Coinbase as a surveillance-sharing partner, a move in line with recent trends in Bitcoin-related applications.

Is the SEC Going to Approve an Ethereum ETF?

The enthusiasm for an Ethereum ETF is palpable among asset managers. However, the SEC’s track record remains a hurdle. The American watchdog has not yet greenlit any futures or spot Ethereum ETFs.

Grayscale’s strides in this space paint a more hopeful picture, with newer applications referencing Grayscale’s successes and integrating elements from earlier Bitcoin ETF proposals.

Read more: 9 Best Places To Stake Ethereum in 2023

James Seyffart, an ETF specialist from Bloomberg, suggests that issuers are testing the SEC’s boundaries, especially for spot Bitcoin ETFs. While he foresees a surge in applications, definitive outcomes might be on hold until May 2024.

Offering a broader perspective, Nate Geraci, the President of the ETFStore, remarked:

“We will see combined spot Bitcoin and Ether ETF filing in very near future. Gradually, then suddenly.”

Top crypto platforms in the US | February 2024



All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.