Grayscale Ethereum Trust discount shrinks to lowest level in a year, traders await spot ETH ETF approval


  • Grayscale Ethereum Trust discount narrowed from 59.34% in January 2023 to 26.64%, early on Saturday. 
  • Ark’s spot Ethereum ETF filing is likely a catalyst behind the shrinking discount and traders are weighing higher odds of the product’s approval. 
  • Grayscale’s plan is to convert its ETH fund ETHE into an ETF, as traditional finance giants push for an approval of a spot ETH ETF filing.

Grayscale’s Ethereum Fund is close to its yearly high, trading at a discount of 26.64%, at the time of writing. The discount has narrowed nearly 55% since the beginning of 2023. The crypto asset manager’s plan is to convert the ETH fund to its spot Ethereum ETF product, and market participants believe the odds are likely stacked in favor of the firm.

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ETHE discount narrows following spot Ethereum ETF filings from Ark and Blackrock

Crypto market participants believe Grayscale is closer to converting its Ethereum Trust to a spot Ethereum ETF product and the odds are relatively higher than the beginning of 2023. In the beginning of January, Grayscale ETHE discount was 59.34%. The discount narrowed to 26.64%, as of September 9.

The Ethereum Trust has $4.9 billion in assets under management and it enables investors to benefit from exposure to ETH as a security, without the challenges of storing and safekeeping the asset.

Grayscale Ethereum Trust Discount or Premium to NAV

Grayscale Ethereum Trust Discount or premium to NAV chart from Yahoo Finance

Several traditional finance giants like Blackrock came forward with their spot Ethereum ETF filings, fueling a bullish sentiment among market participants. The catalysts likely driving the discount lower are Blackrock’s filing for a spot Bitcoin ETF, Grayscale’s lawsuit win against the US Securities & Exchange Commission and 21Shares, VanEck and Ark Invest’s push for a spot Ethereum ETF.

Crypto ETF FAQs

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.

Is Bitcoin futures ETF approved?

Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.

Is Bitcoin spot ETF approved?

Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.


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