As concerns widen around its parent company, Digital Currency Group, Grayscale’s Ethereum and Bitcoin trusts have fallen to record discounts.
The Grayscale Ethereum Trust (ETHE) is currently trading at a significant discount of almost 60% to the value of its underlying assets. This follows a 93% decline in share value from its all-time high in June 2019. The Ethereum Trust is Grayscale’s second-largest offering, with $3.7 billion in assets under management and a holding of approximately 3 million ETH, or 2.5% of the total Ethereum market capitalization.
There are various factors contributing to this ongoing decline, but recent concerns have emerged about the potential impact on Grayscale assets from the approximately $1.675 billion debt owed by parent company Digital Currency Group to the troubled crypto lender Genesis.
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According to data from YCharts, ETHE has traded at this discount level since December 28th.
DB crypto influencer tweeted an all-Grayscale trust table. Grayscale’s trust funds are experiencing a wide range of discounts, with the Ethereum Classic Trust being the most heavily impacted at a 77% discount, followed by the Litecoin Trust at 65% and the Bitcoin Cash Trust at 57%. The Ethereum Trust is trading at a 59.34% discount, while the Grayscale Bitcoin Trust (GBTC) is trading at a 45% discount. Only the Filecoin Trust and the Chainlink Trust are currently trading at premiums, at 108% and 24%, respectively.
Grayscale’s Bitcoin Trust has over $10.5 billion in assets under management and has seen a 65% decline in the past year. The Bitcoin Trust holds more than 630,000 BTC and could see renewed interest if the Securities and Exchange Commission approves its conversion to a spot exchange-traded fund. However, it is currently uncertain if this will occur due to the current state of the cryptocurrency market and regulatory environment.
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