With the market’s reduced expectations for the approval of the Ethereum spot ETF by the US SEC in May, the premium of Grayscale’s Ethereum Trust (ETHE) has reached -20.43%. Is now a good time to buy ETHE?
Grayscale Ethereum Trust’s Negative Premium at -20.43%
Is it a good time to buy ETHE now?
How to purchase ETHE?
After the SEC approved multiple Bitcoin spot ETFs in January this year, it initially led the market to believe that the SEC would also approve the Ethereum spot ETF in May. However, James Seyffart, an ETF analyst at Bloomberg who has made judgments on the Bitcoin spot ETF review process multiple times before, expressed concerns on May 20 that he now doubts the possibility of approval for the eight Ethereum spot ETFs.
Grayscale Ethereum Trust’s Negative Premium at -20.43%
As the market’s expectations for the approval of Ethereum spot ETFs in May have decreased, ycharts data shows that the premium of Grayscale Ethereum Trust (ETHE) has expanded to 20.43%, reaching the highest discount level since November 2023.
Grayscale ETHF negative premium. Image source: ycharts
Is now a good time to buy ETHE?
On the other hand, if you believe that Grayscale’s Ethereum Trust (ETHE) will eventually be approved by the SEC, now may be a good time to get in. For example, investors who bought Grayscale’s Bitcoin Trust (GBTC) during a large premium have seen greater profits compared to holding the spot during the period when GBTC transitioned to a spot Bitcoin ETF. Currently, ETHE has a negative premium of 20.43%, and if the Ethereum spot ETF is approved as expected this year, the negative premium of ETHE will narrow, meaning that investors who buy now will essentially be purchasing ETH at a discounted price.
However, it is still necessary to observe whether ETHE will replicate the situation of GBTC, and even if the ETF is approved, it is important to consider whether the price of the Ethereum spot ETF can continue to rise.
How to purchase ETHE?
ETHE was established on December 13, 2017, and listed for trading in July 2019. It is regulated by the US SEC and is a listed trust fund that can be traded through a regular securities account in the US. However, for Taiwanese investors, it is necessary to open an overseas brokerage account and conduct international remittances, so it is important to pay attention to bank wire transfer fees. Additionally, ETHE also incurs fees payable to Grayscale, which should be considered as an additional cost.
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