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.
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.
All grayscale trusts and their respective premium % pic.twitter.com/TYQf5FmeXt
— Decibel (@tier10k) January 3, 2023
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.
