Grayscale Ethereum Trust nears 2023 high as ETF hopes mount

Posted: September 9, 2023

• The price of Grayscale Ethereum Trust (ETHE) saw an uptick following recent ETF filings made by Ark Invest and 21Shares.
• This has been driven by the hopes of a potential conversion of the ETHE into an ETF.

The value of Grayscale Ethereum Trust (ETHE) has approached its year-to-date high of $12.06 following the recent ETF filings made by Ark Invest and 21Shares, data from IntoTheBlock showed.

Source: IntoTheBlock

Read Ethereum’s [ETH] Price Prediction 2023-24

Grayscale’s ETHE product is a trust that holds the leading altcoin Ethereum [ETH]. Investors can buy shares of ETHE, gaining exposure to the coin’s price movements without necessarily holding the asset.

However, ETHE is not an ETF because it is not traded on an exchange, making it a closed-end fund.

The recent ETF filings have sparked renewed interest in ETHE, as investors see them as a potential way to gain exposure to Ethereum without buying and storing the underlying cryptocurrency.

Since Ark Invest and 21Shares submitted their applications, the price per Grayscale ETHE has climbed by 8%. According to data from IntoTheBlock, at press time, this exchanged hands for $11.85.

Why the rally?

While ETH’s price trended downward, IntoTheBlock noted in a tweet on X (formerly Twitter), 

“Grayscale will be able to convert its ETHE product into an ETF following the push from traditional finance giants into the space.”

According to the on-chain data provider, the possibility of this happening remains high due to ETHE’s optimal performance since Ark Invest and 21Shares made their ETF filings.

IntoTheBlock further noted,

“Following Ark’s spot Ether ETF filing this week, the (discount) gap has narrowed to -26%, its lowest discount since October 2022 per Ycharts.” 

Further, Grayscale’s recent victory over the Securities and Exchange Commission [SEC] might be another incentive to do this. 

In a recent ruling delivered on 29 August, the DC Circuit Court of Appeals sided with Grayscale in an action filed against the SEC. Moreover, it ordered the regulator to review its initial denial of the digital currency asset manager’s Bitcoin spot ETF application. 

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Spot traders do not see any reason to trade

At press time, ETH exchanged hands at $1,632, according to CoinMarketCap. With prices trending in a tight range in the past few weeks, key momentum indicators observed on a daily chart remained flat, suggesting that spot traders have mostly stayed their hands from executing ETH trades.

Lying below their respective center lines, ETH’s Relative Strength Index (RSI) and Money Flow Index (MFI) were 38.15 and 49.21 at the time of writing. 

Source: ETH/USD, TradingView