Grayscale Ethereum Trust (ETHE) is no longer trading at a discount to net asset value (NAV) ahead of the expected launch of Ethereum spot exchange-traded funds (ETFs) in the United States.
According to data According to YCharts, after trading at a discount for the past three years, ETHE reached a premium to NAV of 0.31% on July 3.
The premium or discount to NAV indicates how much higher or lower the market price of each share is compared to the value of the ETH it represents.
ETHE’s discount has narrowed since the crypto market bottomed in December 2022, as speculation intensified amid speculation that the U.S. Securities and Exchange Commission (SEC) would approve spot Ethereum ETFs after launching Bitcoin funds in January.
Despite widening again from March to May, the ETHE discount narrowed significantly after the SEC approved eight 19b-4 forms for spot Ethereum ETFs from BlackRock, Fidelity, Bitwise, VanEck, Ark Invest, Invesco, Franklin Templeton, and Grayscale on May 23.
However, issuers still need to wait for their S-1 registration statements to become effective before trading can begin. This is expected to happen in the coming weeks, but ETHE remains slightly below NAV for now.
ETHE Discount to NAV | Source: YCharts
The Ethereum Bitcoin Trust previously traded at a discount because the shares are currently non-redeemable, meaning the only option for shareholders is to sell them to other potential buyers. However, it previously traded at a premium until the crypto credit crunch in 2021.
The end of the discount is a sign of the imminent launch of Ethereum ETFs, with investors seemingly buying up discounted shares before the Ethereum Trust converts to an ETF — as was the case with the former Grayscale Bitcoin Trust (GBTC) which converted to an ETF in January.
ETHE currently has $9.5 billion in assets under management, according to Grayscale.
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