Grayscale ETH trust nears record 60% discount as nerves continue over DCG

Grayscale Ethereum Trust (ETHE) is trading at a nearly 60% discount to the underlying value of its assets, and the share price is down 93% from its June 2019 high (ATH).

There are many reasons behind the ongoing decline, but in recent weeks, parent company Digital Currency Group’s nearly $1.675 billion debt has impacted troubled crypto lender Genesis. There is growing concern that the may affect Grayscale’s assets.

YCharts data shows a discount of 59.39% at the time of writing. This is the level at which trust has traded since at least December 28th.

Grayscale Ethereum Trust discount 1 year chart. Image: YCharts

Crypto Twitter influencer “db” tweeted an image on Jan. 4 showing the entire collection of crypto-based trusts in greyscale, along with stats showing the premium for each.

Most of the Grayscale trust funds are trading at discounted prices, with Ethereum Classic Trust being the hardest hit, currently at 77% discount rate, followed by Litecoin Trust at 65% and Bitcoin Cash Trust at 57%. It is

Grayscale Bitcoin Trust (GBTC) is trading at a 45% discount.

With Filecoin Trust at 108% and Chainlink Trust at 24%, only two Grayscale Trusts currently trade at a premium.

According to the grayscale formula websiteCurrently, the Grayscale Ethereum Trust (ETHE) pool of 31 million shares is worth $3.7 billion.

ether (ethereum) is worth about 0.0097 ETH per share, worth US$11.77, while the market price per share is US$4.77.

Grayscale parent company DCG came under fire again this week by Cameron Winklevoss, co-founder of crypto exchange Gemini. An Open Letter from DCG CEO Barry Silbert on Twitter.

Related: Will Grayscale be the next FTX?

Winkelvoss alleged that DCG’s Genesis company owed Gemini $900 million as part of Gemini’s Earn product, which the two companies jointly operated.

Arcane Research, a digital asset research and analytics company, January 3rd report That a serious debt allegedly owed by DCG and Genesis to Gemini can see DCG Start Reg M DistributionThis allows GBTC and ETHE position holders to redeem their underlying assets at a 1:1 ratio.

This is bad for the cryptocurrency market, but good for ETHE stock. According to Arcane, “Reg M triggers a massive arbitrage strategy of selling crypto spot rather than buying GrayscaleTrust shares. There is a possibility.”

Winklevoss has been vocal about DCG’s liquidity issues for some time. Tweet Houlihan Lokey, a global investment bank, on behalf of the Board of Creditors, Asset Recovery Path.