ETHE - ETHE: May Still Be Interesting Even If Near Term ETF Approval Prospects Are Low (Rating Upgrade)
2024-04-30 00:29:55 ET
Summary
- Grayscale Ethereum Trust currently trades at a 25% discount to NAV, indicating a potential buying opportunity.
- The SEC's limited interest in engaging on Ethereum ETF products suggests low near-term approval odds, but a legal challenge could still lead to approval on a multi-year view.
- Lack of ETF approval in May would likely have a negative impact on the Grayscale Ethereum Fund, but there is potential for upside if an ETF is ultimately approved.
For much of 2023 into 2024 there was an interesting opportunity to purchase the Grayscale Bitcoin Trust ( GBTC ) which traded at a discount to its asset value because it ultimately was approved by the SEC to convert into an Exchange Traded Fund. That conversion caused that NAV valuation gap to effectively close. I wrote about that process here after a favorable legal decision in August 2023, effectively paved with way to ETF conversion. Some risk remained (such as the SEC disputing the legal verdict, or delaying Bitcoin ETF approval further, or finding another route to block Bitcoin ETFs), but the SEC did ultimately follow the court's ruling and approved a range of Bitcoin ETF products....
ETHE: May Still Be Interesting, Even If Near Term ETF Approval Prospects Are Low (Rating Upgrade)