Grayscale Ethereum Trust Discount Cuts to 10% as Odds of ETH Spot ETF Approval Increase
The Grayscale Ethereum Trust (ETHE) discount has dropped to its lowest level in more than two months, as investors anticipate US ether Spot ETF approvals.
The ETHE discount was around 10% at the time of writing, well down from 20% the previous day. The reduction comes as investors wait for regulators to sign off on spot ether ETF approvals in the US, where the Securities Exchange Commission has asked companies looking to launch such funds to update and resubmit documents necessary for approval.
The Grayscale Ethereum Trust is an investment vehicle that offers direct exposure to ether price movements, according to Grayscale's website. The fund has over $10 billion worth of ether in assets under management at the time of writing.
On a technical level, the ETHE discount represents the difference between the market capitalization of ETHE and the underlying value of the fund's ether holdings. However, the discount is also considered an indicator of the likelihood of an ether ETF being approved.
Investors are rushing to purchase ETHE to obtain discounted shares of the fund ahead of its potential conversion into an ETF.
Shortly before spot bitcoin ETFs gained regulatory approval in the US on January 9, traders similarly reduced the discount on GBTC.