Grayscale ETH trust is approaching a record 60% discount as concerns regarding DCG persist
Concerns about the liquidity of Digital Currency Group have led to sharp discounts on Grayscale’s Ethereum, Bitcoin, and Litecoin Cash Trusts.
The Grayscale Ethereum Trust (ETHE) shares have decreased 93% from their all-time high in June 2019 while trading at close to a 60% discount on the value of its assets (ATH).
The continued drop has a number of causes, but in recent weeks there has been an escalation in worries that Grayscale assets may be impacted by the parent business Digital Currency Group’s debt of over $1.675 billion to the struggling cryptocurrency creditor Genesis.
The trust has traded at this level since at least December 28 according to YCharts data, which at the time of writing shows a 59.39% discount.
Crypto On January 4, Twitter influencer “db” tweeted a snapshot of the whole array of Grayscale crypto-based trusts, together with statistics displaying each trust’s individual premium.
Every Grayscale trust and their respective premium % pic.twitter.com/TYQf5FmeXt
— db (@tier10k) January 3, 2023
It revealed that the majority of Grayscale’s trust funds are selling at a reduction, with the Ethereum Classic Trust suffering the greatest and presently offering at a 77% discount.
Trades for the Grayscale Bitcoin Trust (GBTC) are discounted by 45%.
Only two Grayscale Trusts—the Chainlink Trust at 24% as well as the Filecoin Trust at 108%—are now selling at a premium.
The Grayscale Ethereum Trust (ETHE) trust presently has funds worth $3.7 billion, which were gathered from 31 million shares, as per the firm’s official website.
This week, Grayscale’s parent firm, DCG, came under criticism once more when Gemini co-founder Cameron Winklevoss released an open letter via Twitter criticizing DCG CEO Barry Silbert.
Winkelvoss asserted that Genesis, a subsidiary of DCG, owes Gemini $900 million in the capital that was lent to Genesis as a component of the Gemini’s Earn program that the two businesses jointly operated.
The large amount DCG and Genesis allegedly owe to Gemini may cause DCG to start a Reg M distribution, according to a study published by Arcane Research on January 3.
- Grayscale launched an institutional-grade DeFi fund and index
- Is DCG selling their assets before filing for bankruptcy?
- Is Genesis going Bankrupt?
Winklevoss had previously taken a strong stance on the purported DCG liquidity concerns, tweeting an update in December of the year 2022 that stated international investment bank Houlihan Lokey has proposed a strategy on account of the Creditor Committee to establish a route for the restoration of assets.