Grayscale Leveraging Massive Ethereum InflowsThe Trust has been aggressively buying Ethereum this year. According to these calculations, as of April 24, about 50% of all ETH mined in 2020 had been purchased by Grayscale’s trust. The trust started as a private placement for accredited and institutional investors to gain exposure to Ethereum. Then, as had happened earlier with the Grayscale Bitcoin Trust, the Ethereum Trust (ETHE) was traded publicly. In January, Grayscale Bitcoin Trust became an SEC reporting company. If the filing comes into effect, it would make the ETHE the second such traditional investment vehicle for crypto, the announcement added. The Ethereum Trust has been extremely popular and successful for Grayscale. In fact, the Trust brought the company massive inflows to the tune of $135.2 million this last quarter. What’s more, this new money made up a huge portion of Grayscale’s overall capital. It explained:
…Demand for Grayscale Ethereum Trust accounted for almost 15% of total inflows into Grayscale products during our biggest quarter yet!
How This Could Affect the Ethereum TrustThe firm clarified that they are not an Exchange Traded Fund (ETF). The structure, however, is similar. Nonetheless, it makes its SEC filing voluntary.
The Trust started as a private placement solely available to accredited and institutional investors to gain exposure to Ethereum in the form of a familiar security without the obstacles associated with buying, storing, and safekeeping Ethereum directly.A registered security would be appealing to more traditional investors. Still, some burgeoning features of Ethereum, such as the recent surge in DeFi interest, would be unavailable to Trust holders.
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