On the day of The Merge, I bought 1000 shares of ETHE, which represents 9.8672 ETH. ETHE discount to NAV: -23.70% as of Sept. 13, 2022. I'm now LONG 232 ETH, 200 of which are staked at the current rate of 3.25% APY in ETH rewards, and 1,000 shares of ETHE; HODL to riches!!! LFG!!! GLTA!!!
I like them as a bet. The discount is based on fear…but that fear doesn’t fit with their actions. They are trying to convert to ETF…so it stands to reason they have the BTC in hand and not just selling IOU BTC. That said, I haven’t actually bet anything yet. Lost too much on ETHE already.
I will caution that some IRA providers (e.g., Vanguard) have recently changed their rules such that you are not allowed to trade in OTC products. As a result, common vehicles like ETHE or GBTC are not offered anymore So, DYOR, as always.
Yeah I've seen your post, out of curiosity is this your only ETH exposure right now? Or do you still have other on-chain? I've been juggling between the idea to convert a larger portion of my on chain ETH to ETHE as well mainly for the same reason
[I got in when the discount was 45%](https://www.reddit.com/r/CryptoCurrency/comments/z7owok/i_bought_100k_shares_of_grayscale_ethe_as_the_45/?utm_source=share&utm_medium=ios_app&utm_name=iossmf) Your last point on legacy issues is the main reason why I hold ETHE as well. I am sold on the fact that my family is able to encash the whole sum if they want to if something were to happen to me.
As someone who held GBTC in 2017 and loaded up on GBTC in November/December 2020, the risk reward is not worth it right now. OP has to have multiple things go right for him. 1. Bitcoin price has to go up 2. GBTC value has to keep up with Bitcoin. There are tons of people who bought when GBTC starting falling to -10% discount thinking it'll eventually catch up. It kept falling, and falling and falling to like -40%. When BTC went up, GBTC hardly moved at times and when BTC fell, GBTC dropped like a rock then never recovered - rinse and repeat. 3. Barry Silbert's fuckery is not going to fuck you over. The parent company of Grayscale is Digital Currency Group and is also the parent company of Genesis which just declared bankruptcy owing creditors $3.4 Billion (Genesis company who lost Gemini Earn's customers Bitcoin). The parent company Digital Currency Group owes Genesis $1.7 billion. I warned of the volitility and wackiness of the Grayscale products in late 2020 when the next bull run was getting started - the GBTC premium had fallen to 13% and seemed like a good buy for the bull run since the premium reached ridiculous levels in the 2017/18 run. I made good money in my Roth IRA and HSA since I sold early in 2021 but the premium just kept going down, smart people got greedy on the discount since it was free money and the discount just kept getting bigger and bigger. > Just a warning. I would not invest any significant money in the Grayscale Ethereum and Litecoin products, ETHE and LTCN. Look at the fucking premiums, look at their liquidity and sometimes their movements have absolutely nothing to do with how the underlying crypto moves. ETHE is down -16% today while LTCN is down -1.5%. The volatility and random movements are insane. When large institutions lock up periods are over and are allowed to sell into the market it absolutely craters the prices at times; and when investors get FOMO it's a rocket ship. I've been holding GBTC and/off since 2017 and it was more volatile but it's stabilized but I still have trouble holding it although it only has a 13%-30% premium and much more liquidity. https://np.reddit.com/r/CryptoCurrency/comments/km2c8a/daily_discussion_december_29_2020_gmt0/ghedr3e/
That is why I only want to convert 20\~30% of my ETH exposure into ETHE once my staked ETH is unlocked, though I have the urge to convert even a larger portion, but hopefully I can contain my greediness and stick through my original plan
GBTC and ETHE are registered securities, so holding crypto anywhere else (other than self custody) is taking a bigger risk. I think the actual risk is basically the same as the risk of BTC and ETH. If they succeed, I see no reason Grayscale's trusts don't also. While crypto has been going up recently, the discount to NAV has closed also, so seems like decent evidence that GBTC and ETHE are going to have better returns in the short to mid term.
Because I got into staking with too much of % of my fund initially, so I wanted to divest some out of it, and to me ETHE huge discount to NAV is something I am willing to risk a little bit for. But majority of my crypto fund would still be in ETH that's for sure.
Genesis was happy to hand money to 3AC because they were arbitraging GBTC, increasing the AUM of the trust, directly boosting DCGs bottom line. The GBTC arbitrage trade was bonkers from 2019-21 could pull 30-90% APR easily. The ETHE was even more extreme but the liquidity window was far smaller.
My personal experience. Last cycle I mentioned to my boss bitcoin. His response was "oh shit, top". That was at $13k. He had bought at 7k. The top investor in the company had bought around 7k as well. We ALL BOUGHT GBTC, and we all gambled in 2017 through GBTC. We then all bought ETHE. I had many friends who entered the cycle around 30-40k. They all bought the most over 50k. Their parents bought at 60k. Guess what: 2 people out of 100+ has 1 btc. Let me point out that the average income of these people is 150-250k, most without kids. 3 are still dcaing. The vast majority have greatly reduced their position. It's either no longer fun to buy and/or their income is down and expense are up. However, there is now a new class of people who are seeing how bizarre the world is and equating bitcoin with digital gold. While many of these people are stacking relentlessly, many want to buy lower. The cycle is almost matrix like: 1st cycle buy, no clue what buying-100 people come, 90 leave 2nd cycle learn a bit, 45 of the 90 who left came back, another 150 come in, 135 leave 3rd cycle learn more, hard wallet, etc, 300 come in, 67 of the 135 who left come back 270 leave I know many people who bought real estate before 2008 and claimed they would never buy again. These were actually smart people who held out in 2015,16,17,18,19, 20, and finally relented in 2021. I am truly terrified of the next cycle, whether it comes this year, 24, 25, or 26. The reason is that there is a mass adoption idea -apps on cell phones, public companies owning the asset, ETF, plus the halving, plus lowering rates/qe.
What exactly is "uncompliant". Take GrayScale trust funds as an example. Those are SEC regulated funds like any other SEC regulated company or fund. They have rock solid terms, approved by the SEC, unencumbered and regulated, BUT they are now trading 50 to 60% discount to NAV (ETHE at 60% and GBTC at 50%, and it's worsening every day). Why? Because GrayScale refuses to prove they actually purchased the assets we gave them money to purchase, but also because the panic the spread from such action is tremendously beneficial to them personally, at our expense. We're now trapped, what is it, about 350,000 of us trapped now and would be forced to take a 50% loss or more while GrayScale executives have become billionaires and are bleeding the unproven principle, the underly assets, OUR funds by 2.5% NOT on the performance of the funds themselves, but on the valuation of the underlying assets, which means their take is HUGE. The SEC approved these, the SEC regulates these, we're getting robbed blind, and the SEC does nothing. They want more power to regulate more things, but they can't even regulate what they are already tasked with regulating. But it doesn't stop there. You can find hundreds of SEC regulated companies/stocks, which are just shell companies, providing ways, means for huge fund managers to poorly, intentionally poorly sucker retiree funds into them, enriching the fund managers and executives while spreading losses across hundreds to thousands of ignorant investors. So, what exactly does "compliant" mean? A company or fund that pays the SEC enough to get listed or one that behaves ethically, performs their fiduciary duties, and operates with the interest of investors over themselves with investors' money. By all evidence, it seems the integrity of the SEC is in question over their existing powers and regulations. They don't need more power, with this level of integrity and "regulation", they need less OR maybe we need regulators for our regulators.
Meh, no reason in particular. I come here from time to time looking for information about GrayScale. I have a deep understanding of the technicals of Bitcoin, but especially interested in Ethereum because I know how to build things upon it as a platform. I'm excited about being able to build apps and services for small to medium sized businesses that level the playing ground, that cut out the middlemen. I also have a deep understanding of traditional markets, finance, and investing. So, when I saw GrayScale introduce SEC regulated and approved trust funds that would allow me to invest a portion of my retirement, to diversify, my retirement and our children's college funds into tax deferred accounts for a platform and emerging technology, I did. I studied their finances and SEC filings and dug into their THEN histories and opted to invest a portion of tax deferred holdings/earnings into ETHE. In the past year, the FTX scandal rocked the crypto space. While I expected volatility in tech and emerging platforms, I had no reason to be concerned about my ETHE investment, UNTIL... GrayScale began refusing to provide evidence that they actually invested our money on our behalf into the assets they claimed to have purchased. THAT inaction actually works in their favor, as they charge a 2.5% "management fee" on the value of the proclaimed (yet unproven) underlying assets. It's like they are saying "trust us, we took your money, it is according to our SEC filings 100% unencumbered and invested in these assets, this number of coins purchased, but... we're not going to prove it". Now, why would they do that, everyone asked? That induced fear caused many people to sell off in panic, and THAT formed a discount to NAV. It is currently at over 60% discount to NAV, which means their "management fee" (aka salaries) are huge now, much much higher than anyone would have agreed to. And it's bleeding the supposed (yet unproven) underlying assets very quickly. If the trajectory continues these things, SEC regulated and approved trust funds, will be at a 99%, 100% discount to NAV. It's already unprecedented, and yet, they do nothing. It's not my entire life savings, but it is having a HUGE detrimental effect on our present and future finances. And the SEC just blathers on and on and on about wanting more power to regulate more markets and they cannot will not even regulated the funds they already proclaim to regulate. So, I'm here from time to time to see if ANYONE is going after GrayScale or if GrayScale has finally revealed evidence they did not commit fraud like SBF/FTX. All I can do is pray... and share a bit of wisdom that people should diversify. That doesn't mean you won't get burnt/robbed, you will, but it means they won't steal everything you have from you. Anyhow, wish me luck, and all 350,000 of us that trusted the SEC and GrayScale with these SEC approved trust funds. We're not all super savvy clever investors or technologists. It's why we rely on the SEC and similar. Many of us are just diversifying our investments, we're teachers, firemen, nurses, engineers, and regular working class people. And at the top of every one of these multi-billion dollar companies are a handful of soft-faced frat boy generationally wealthy billionaires, who are making/robbing ALL of us of billions of hard EARNED money. Life changing amounts of money. NONE of us deserve this, and WE are not the greedy ones. We're just doing what we can as wisely as we can to take care of our families and responsibly take care of ourselves in our elder years. What these people at the top do now, what they have taken, and the harm they are doing... it needs to stop and they need to make people whole. We won't forget. Ever.
tldr; The Grayscale Ethereum Trust (ETHE) is trading at a 59.39% discount to the underlying value of its assets, with shares falling 93% from its Jun. 2019 all-time high (ATH). There are fears that fallout from parent company Digital Currency Group’s debt of approximately $1.675 billion to troubled crypto lender Genesis could impact assets. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
ETHE's decline can be attributed to multiple factors. "It's likely a combination of low faith in the fund being redeemable anytime soon, low faith in a spot ETF being approved anytime soon and low faith in the general crypto-market outlook," For me it was always strange how grasscales trust can be priced so differently from the underlying asset. You don't see that with other funds. Is it because the volume and trust is so low that an apparent arbitrage is not utilised?
Right. According to the terms they cannot use our assets to bail out their friends, BUT they are intentionally NOT providing evidence that they actually used our money to buy the underlying crypto. This has induced an unprecedented discount to NAV, pushing valuations of the funds themselves to far less than half the value of OUR assets, our crypto. THEN they continue charging a 2.5% management fee, which is bleeding down the principal, the underlying assets. The charge that fee based on the market valuation of the assets vs. the performance of the trust funds. That means they have self-incentivized themselves to NOT provide evidence, induce more fear, drive the discount even further down, and extract even more wealth from the underlying assets. GBTC and ETHE are dropping 1 to 2% per day, and holders are watching retirement funds, college funds, savings and all just disappear. When will it stop? 99% discount to NAV? 100% discount to NAV? 110% discount to NAV, where we have to pay them to rob us? It's insanity. They can only save us, AND do their fiduciary duty at this point by #1 unquestionable proof that they spent our money on the crypto and #2 offering 100% redemptions to anyone who wants out. That would return the funds to NAV and fix the problem. If they did that, they wouldn't be able to exploit us anymore, but I don't think the funds would need to be dissolved. They might even be able to restore community trust in their company. I think, they're not doing either though because they are getting richer as fast as holders are getting poorer.
Well, according to the SEC, each of these GBTC, ETHE, and all are independent LLCs. GrayScale itself is independent and unencumbered by whatever umbrella company (DGC? DCG?) that oversees all. The SEC approved these trust funds and GrayScale would be committing fraud to have NOT invested our funds in the assets they promised to acquire for us. These are after all in the SEC regulated sphere, and they are publicly traded trusts now. GrayScale has a fiduciary duty to their investors. What is baffling is they have yet to provide evidence that they actually used our money to purchase the underlying assets. This action alone in light of all that has happened in the markets is a breach of their duty. And it has caused a panic, which has driven the valuation of GBTC and ETHE down to less than half the valuation of the supposedly acquired underlying assets. This is greatly harming investors of all sorts. Many of us are not "crypto traders", we've merely diversified our holdings for retirement accounts, college savings funds, and other normal investments into technology funds like these, and we did so understanding the volatility of the underlying technology and markets because well, hey, tax deferred accounts and SEC regulated. Furthermore, GrayScale executives are becoming obscenely wealthy through this fiasco, as the funds trade at more than 50% discount to NAV... YET they continue to charge a 2.5% "management fee" on the valuation of the underlying assets vs. the valuation of the funds themselves. This means that fee is actually far greater, they are enriching themselves by the mere act of NOT proving the spent our funds on what they promised within these SEC regulated trusts. THAT is a huge breach of their legal responsibility and it smells of fraud to me. It smells no different than FTX shitstorm. Even worse, now that we've all lost over half of the value of our investments in ETHE and GBTC, they speak of offering redemptions on just 20% of what they've taken. At this point they need to do two things, and the SEC merely needs to do its fucking job since they are the "regulators" of such things. 1. Provide hard audited 3rd party evidence that they used our funds appropriately, not just for their most popular GBTC, but for ETHE, and every single other fund they are bleeding down for their personal gain/salary/enrichment right now. 2. Offer full redemption on the shares we all have. Some may want out, but many will stay in IF they provide the necessary proof that they have not committed fraud AND valuations return to NAV Anything short of that is just pure robbery, plain and simple. Everything they've said so far has just been stalling tactics to extract and rob us even more. Most of their investors are likely at a +50% loss now, and worsening every day, while ETH, and BTC are actually recovering. Some are in an even worse position. And the SEC is just doing... I don't know what the SEC is doing, blathering about wanting more regulatory power over more things, and they can't even handle the very funds and stocks and other things they claim to "regulate" right now.
There are a lot of us who have watched Grayscale bleed our ETHE and GBTC holdings, lifetimes of savings, retirement funds, college savings for our children, home savings, and hopes and dreams, our hard earned money bled down to less than 50% of NAV and the are still robbing us worse and more every single day. These are SEC regulated and approved funds and they have robbed us of over 50% so far. Yet the SEC does nothing. We have little left to lose now, but the executives turned themselves into Billionaires
Well, I can't cash out of my tax deferred holdings in GrayScale's ETHE. Their shenanigans and "management" have those funds trading at more than a 50% discount to NAV. I'll just have to ride that to zero. And I can't cash out my staked ETH. So, I'll keep contributing to the network and validation there. As for direct investments, I'm still investing for the tech as cliche as that sounds. Ethereum provides a platform that people can build upon, and that is exactly what I'm doing. I have no intention of every selling off.
Great. So can we talk about how GrayScale isn't just GBTC, but also ETHE and a stack of other trust funds, and they're all trading at a MASSIVE discount to NAV now. ETHE is at over 55% discount to NAV. GrayScale is collecting 2.5% in "management fees", while the only thing they are actually managing is their income from it, while all common shareholders on this SEC approved asset are losing their asses, err assets. But it's even worse, the fees are a function of the underlying assets valuation, which means the shareholders are actually losing at a much higher rate now. One that we never agreed to, which is complete abusive, exploitive. They are robbing us. But it doesn't stop there, they have even refused to provide evidence that they even invested OUR funds in OUR assets, and we have no way to get our assets, our tokens... which may or may not exist. So, they could be charging 2.5% in fees on made up numbers. Give us our coins and stop the charade and theft.
TLDR : Grayscale's $GBTC & $ETHE discount is getting attractive day by day. The risk factors of the trust come mainly from Coinbase Trustee, DCG Management, and Trust Auditor. Opportunity cost also plays an important role in making this discount so huge. Unless something dramatic happens
I like Ethereum, the platform and technology. I understand the economics behind it, staking, rewards, smart contracts, and all. I own and stake ETH and am confident in the progress the community continues to make. I also reviewed the terms and SEC filings for GrayScale's Ethereum trust funds. In short, I didn't go into an ETHE investment blindly. I opted to put a portion of my retirement and our children's college savings into it, because allowed tax deferred and regulated exposure to crypto, and specifically one that I know well. The explanation at the time of inception for the ridiculous premium is that some people were confused about the terms and ratio. They thought 1 ETHE was 1 ETH, traded on the open market. That seemed like a plausible explanation, and I didn't buy in during that time. After a long time observing and studying more, I bought in right about at NAV. However, all GrayScale funds have continued to plummet from their NAV and now ETHE is trading at more than a 50% discount. I no longer believe that initial spike was due to naive, confused investors who thought each share of ETHE was worth 1 ETH. I think it was part of a cabal of early investors. And now, common shareholders are suffering the losses. Why do I speculate there is something fishy about the funds? 1. Look into all of the top holders if you can find them. They are hard to find. There are dozens, maybe even more, skeleton private hedge fund LLCs with little to no information about the people operating them. IF you continue digging you will find some information. Most of the parties involved are... young socialites, generationally wealthy people living the good life, but mostly, you're just not going to find a lot of real details about the top holders. They're hedge fund LLCs look like shells setup specifically for obfuscation. Nothing like you find from reputable investment companies. Point being a deep analysis, graphing of people, connections, names, affiliations, buddies and friends and finding such obscurity and obfuscation in many is... not reassuring, but rather the opposite to me. Just my opinion, maybe you can find something more and positive. 2. GrayScale will not reveal the wallets, provide proof of reserves. They proclaim the reason is for security, but if that were the case, then everyone would question the security of blockchain technology in general. 3. GrayScale charges a 2.5% management fee on the underlying asset's valuation NOT on the valuation of the fund itself. A massive discount like this renders that management fee exploitive, obscene, MUCH higher than anyone would reasonable agree to. Yet, they refuse to correct it. 4. GrayScale has only suggested that they MIGHT offer a tender offer on ONLY 20% of their GBTC fund if the SEC refuses conversion to spot ETF, which the SEC has already done so multiple times now. It's highly unlikely that GBTC will be converted, and therefore even less likely that ETHE and their other publicly traded funds will be converted. 5. Now imagine a scenario where early adopters, their buddies, helped pump the initial valuations very high, but then began selling off underlying assets... or even worse... since GrayScale senselessly refused to provide proof of assets, imagine that they never even bought the assets on behalf of investors. This would mean that their buddies who received lots of shares are merely selling worthless shares to common shareholders on the open market. That would explain why they are perfectly ok with selling at such a loss... because it's not a loss to them, despite that insane incomprehensible pump/premium at the beginning. If that is true, they could sell their shares to common shareholders, retirement fund managers, retails investors, anyone on the open market till the discount goes to 99% and still come out ahead. (And the discount just keeps growing. How many people do you know would be ok with losing half their money in a year, while the proclaimed NAV is worth twice as much? It makes no sense.) These funds are not like real estate or other funds, where the math can get complicated for assessing and auditing asset valuations, and the management of those assets. With crypto, the effort to audit, to prove with absolute certainty that they have OUR ETH (or GBTC or any of the other offerings) is 100% transparent and quantifiable... well, it should be, so why are they resisting this at all? My opinion is IF they truly own the ETH they bought with our funds, if they have our ETH, then it's now time to return it to us, to offer redemption. They are exploiting us, robbing us. I speculate if they or their buddies do own any ETH at all, they are exiting now, while the rest of us are trapped, watching our shares plummet. Simultaneously, they're robbing us with fees that do not align with the valuation of the trust itself anymore, and instead a function of the valuation of merely proclaimed underlying assets for which they have provided no absolute proof, when they actually could provide proof... IF they had the assets, our assets, our coins. They should offer us our ETH in return for our ETHE and make us whole. Yet that haven't even offered a tender offer, haven't corrected their fees, are not taking advantage of staking or doing anything at all to return value to investors. I've never seen an SEC approved fund like that, so opaque, doing so much harm to so many common shareholders, and the SEC isn't doing jack shit to wrangle this mess in. Disclaimer: I'm more than pissed, it's a devastating loss, and GrayScale is gaining at my expense. They are not operating at all in the best interest of their investors, but they are living quite well, prospering quite well on our money.
I mean you act like you want a reliable low cost/free way to transfer to your wallet. A service costs. Choose one, can't have both. I've went from Four exchanges to mostly Coinbase, kraken. I'm no longer adding to my crypto. Com or binance for now. You could mine, but then your taking a huge risk with up front capital costs. I also am accumulating in ETHE via brokerage account. (they hold via Coinbase) GL .. Pro Tip: on a side note, just turn on notifications on one of exchanges which notifies you when there is a 5% drop. Buy then. !! ( More than Covers your 2% ish fee) for DCA -J
The SEC approved the terms on GBTC, ETHE and other Grayscale trust funds. Grayscale nor anyone can borrow or loan or encumber the underlying assets in any way. SEC approved. Coinbase verified. We'd probably see them return to NAV if another trusted party audited OR if they simply revealed their addresses on cold storage, BUT they haven't done that... yet. I think the reason they have not, and why they are not allowing redemption on the underlying assets is because (read the details, terms, and now lawsuits), they are charging 2.5% "management fee" on the value of the underlying assets (GBTC, ETHE and others). That valuation is now over twice as high as their share valuation. They are making a killing... at our expense, and hell, if they can keep the sentiment this negative, and the discount this large, they... I just dunno... what happens when it goes to 99% discount, yet OUR underlying assets are still supposedly there? Where is the SEC in all this? Why are they blocking redemptions? Why won't they allow conversion to ETFs? Every single party involved seems to be reaping the rewards except the common shareholders, who are losing lifetimes of savings, life changing investments.
I think they are intentionally NOT doing so and taking advantage of the negative sentiment, driving the discount from NAV. THEN taking advantage of it. If you read the terms and the lawsuit, they are charging 2.5% on the underlying assets' actual valuation, NOT on the share price. Everyone holding ETHE, GBTC and other are getting robbed.
The SEC approved their trusts (GBTC, ETHE, etc.). Each are independent LLC's, and are fully backed. They cannot borrow, loan, encumber the underlying assets in any way. Coinbase has even verified their balances. This discount is absolutely wrecking people who have retirement savings, college savings, emergency savings, investments of all sorts from a plethora of funds and direct investments. It's an amazing discount, a once in a lifetime discount, IF they are not committing fraud. I say bring on the lawsuits. I've been stuck in these trusts so long now, it's a lifechanging (or life ruining) amount of money now, which has just continued to plummet. I could weather through the volatility of ETH itself, but watching this thing drop 50% now on ETHE is insanity. At this point they need to be forced provide absolute proof they haven't pilfered OUR money.
I have GBTC and ETHE and am also bag holding. I think we just have to eat the yearly 2% fee and wait for the ETF. It *should* get approved by 2025 I’m guessing. This whole genesis DCG fiasco does introduce a fair bit of uncertainty when it comes to holding these two products tho
Most of my mistakes were in 2018. Not selling because I was worried about short term capital gains. Then buying back in way to early because I didn’t understand that crypto could easily drop another 50%. In 2021 the biggest lesson was the dangers of recursive borrowing on Aave. Also known as leverage. I’ve been overall pretty good during the bear of 2022 tho. My biggest risk right now is grayscale GBTC and ETHE but I’m hopeful DCG will find a solution to their debt problem
More than one crypto chain analyst has now confirmed that Grayscale has the coins to back GBTC and ETHE. Coinbase has also confirmed. Yes, we'd all love to see the wallet addresses, but you can read the terms approved by the SEC when each of these individual funds were setup up. They clearly state by those terms they'll never loan or borrow against their clients holdings. Their greatest liability and risk is their management fee of 2.5%. The SEC regulates these funds and Coinbase. Grayscale has even pleaded for greater scrutiny because they want to convert GBTC (and assumably set the precedent to convert ETHE and others as well) to ETFs. These are not companies nor government sponsored regulators colluding to destroy both the crypto and traditional markets. These are the actions of large companies working hard to play by the rules. At the same time FTX and Binance (CZ) got into a disagreement and a war. I've never seen such a barrage of bots and spammers and organized negative sentiment being pumped out. It's a fucking smokescreen, and it begs the question of who deployed the smoke screen and why? What relationship did Binance have to FTX, and why are they dragging GrayScale, Coinbase, and the SEC into it. IF all the FUD were true, we're not talking about a crypto setback, we're talking about corruption at the highest levels, putting even the SEC as an accomplice. And that means every retirement fund, every 401K, every REIT, every approved and regulated fund and company is now a question market. Did they all collude, who paid kickbacks, what exactly does the SEC regulate if they can't regulate listed, publicly traded funds and companies? Rather than believe tsunami of negative spam flooding forums and shit websites, and shallow journalists parroting the same thing over and over in a ceaseless echo chamber, and rather than believe that Grayscale, Coinbase, and the SEC are in collusion and lying... I think I'm going to take all this negative bullshit with a pound of salt and recognize it for what it is. Bullshit. A smokescreen. A distraction. A cover up by whomever is the broadcasting source. I'm also going to places some fun bets on this. When all the dust has settled, Coinbase and Grayscale are going to come out on top, and Binance will be sitting right beside FTX, for the same reasons.
This was more meant on the article - they mention all the risks, but with this ending I felt like they are leaning towards ETHE: \>In short, if you know what you are getting into, ETHE could be the score of a lifetime, however there are serious risks to consider here.
tldr; The Ethereum Investment Trust (ETHE) is an investment product by Grayscale which gives investors and traders exposure to ETH (ETH). ETH is the only way to get exposure to cryptocurrency on the traditional markets aside from trading Bitcoin futures. ETHE often trades at a substantial premium to ETH. The value of your investment is decreasing by 2.5% a year. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Another same old news and this article is so low effort. Anyway I just bought another 1200 share of ETHE yesterday at $5.53 (equivalent to 50% discount to NAV) Can’t wait for next bull run when people rush in again to realize that sweet profit.
That does raise a question for me. If you hold GBTC or ETHE or whatever trusts' shares, and the discount just keeps on dropping, eventually they may get delisted. As a shareholder you still own those shares and thus the underlying assets. It seems logical that could result in dissolving the trusts. How do shareholders get paid then? I own REITs as well, and have always trusted the SEC does their fucking job. I've never had a REIT dissolve. So, not really sure what the outcome is in such a scenario. Do you know?
If Grayscale does not present their wallets and holdings on GBTC, ETHE, and other listings, then it isn't just a Grayscale problem. The SEC regulates and permits what may be listed on in the markets. They've passed and maintained through the scrutiny of the SEC. They have even challenged rulings by the SEC to convert GBTC into an ETF. Millions of retirees and fund managers and investors have invested their earnings into these trust funds in tax sheltered accounts, 401Ks, pensions, and IRAs. You can't just say you've started a trust fund, real estate or otherwise, and the SEC just blindly lets you take money from people without proving you have the assets. If you read their SEC filings, you see the terms. The SEC approved. So, all this means is IF Grayscale is a fraud, then the SEC is complicit as well. If that were true, then the SEC and every trust, every company, EVERYTHING that they regulate is in question, corrupted. A reveal of such corruption and collusion would not just take down the crypto markets, it would take down EVERYTHING. I'm eager to see how this is addressed, ASAP. Because right now, after days and many hours of perusing legalese, chasing money trails, investigating people and connections, they look solid, BUT if they had the help of the SEC in committing fraud, it could all come down. Otherwise, if they are solid and true, they'll reveal their wallets, and buying in while all this FTX fiasco is dragging everything down means you get damn near a 45 to 55% gain when it returns to NAV.
You’re betting that Grayscale and DCG come through with having enough reserves, essentially. If it is found out that they do not have what they say they have, they’ll burn to the ground like FTX and instead of a 50% discount you’ll be able to buy ETHE for a 90% discount to NAV. Not your keys, not your crypto.
It's fine, if the discount to NAV and go as long as possible so I can slowly accumulate more, I'm guessing just a bull run would most likely close the NAV gap and probably even turn it into premium when the average joe that doesn't know how to keep their own crypto buy in. At \~45% discount right now when the gap close 1ETH equivalent of ETHE is going to become 2 ETH, it's just suck all my ETH is locked in validators or else I would sell even more ETH to buy ETHE.
Yes, I'm aware of all you said, DCG is having liquidity issue and they are the largest holder of GBTC which means if they fail to get the emergency loan it's highly likely they would further dump their GBTC holdings and widen the discount gap. I also mentioned in my OP they refused to provide proof of reserves, but the thing is, I'm betting on Coinbase woudln't be colluding with them to lie about the reserves, which if that's the case, I'm willing to lose the fraction of my highly risky yet highly rewarding bet. Note that I'm already mentioned in my previous post I'm only putting about 5% of my ETH in ETHE, which is after calculating the risk and rewards and matching my own risk tolerance.
Pls someone enlighten me People here said that Grayscale cant liquidate eth or btc because its a trust But then why Blockworks says this: >4/ Another subsidiary of DCG is Grayscale, who is known for their crypto asset Grayscale Trusts, most notably GBTC and ETHE. If the Trusts are forced to liquidate, that means they will be a forced seller of the underlying tokens in order to distribute them back to holders. https://twitter.com/blockworksres/status/1593667851453288448
It seems like there are still a few people here with logic, I'm guessing OP intentionally left out the fact Coinbase is Grayscale asset custodian. Anyway, I'm continuing to scoop up some highly discounted ETHE while people in fear and spreading half-assed DD. I even heard some people dump their GBTC because they are afraid the fund would be dissolved, I'm like what? Isn't that one way for us shareholders to close the NAV discount and profit?
I'm not sure if OP intentionally left out the fact that Coinbase is the custodian for all Grayscale Trust assets, or he just did not know. Because if people believe the case where Grayscale is insolvent and misused the assets, then Coinbase would be it's partner in crime. I am also guessing for most people reading OP post should probably be confused, this is because OP himself is probably also confused, and then most people just went with OP's title "Grayscale gonna fall" Disclaimer: Yes I have position in ETHE where I purchase between 35\~40% discount, which I would still continue to purchase more, because I don't think Coinbase would assist Grayscale in any illegal activities. (And even if that's true everything in crypto will be fucked anyway.)
I might be wrong but i don't believe they can't dissolve GBTC/ETHE, here's why: 1. DCG, Grayscale and Genesis are all separate legal identities. From a legality perspective the liability and insolvency of one has no impact on the other. 2. Grayscale is under the scrutiny and legal frameworks of the security exchange. 3. DCG can't legally redeem GBTC/ETHE for bitcoin and eth to sell without getting approval from the SEC. Given that they've repeatedly said no to an ETF i doubt that they would allow a one time redemption. Additionally: 1. Cathie Woods just bought another $3m worth of GBTC. I dont think she would have done that without doing her research and knowing the risks. 2. Grayscale has previously survived multiple bear markets bringing it down 80%+ 3. GBTC is the only thing big investors can buy right now due to regulations, if anything were to happen to it there would be a lot of lawsuits against DCG. Also what would be worse for DCG? Letting Genesis collapse and having it file chapter 11 bankruptcy or liquidating GBTC/ETHE?
I was pretty sure that Grayscale is going to survive, but then I read this. >Ark Invest had recently acquired the Grayscale Bitcoin Trust shares at a total value of 2.8 million. Anything $ARKK touches nowadays turn into shambles. So, now i am not sure. ​ On a serious note, GBTC and ETHE trusts are controlled by Grayscale, and not genesis. Their may be some turbulances, and premium may further decrease considering the current financial troubles. But, I don't think they are going to dissolve $10B worth of GBTC and ETHE, just to solve the problem of $175M locked in FTX.
Nice just saw this on Twitter: https://twitter.com/stackersatoshi/status/1592768898163785729?s=46&t=Su5oNtsYViEgIFdPkFhNkA > There are rumours about Genesis Trading being insolvent despite receiving an infusion of $140 million a few days ago. > The parent company of Genesis is DCG, which is also the parent company of Grayscale. > Grayscale is one of the largest holders of bitcoin, worth $11B https://twitter.com/autismcapital/status/1592756828727050245?s=46&t=Su5oNtsYViEgIFdPkFhNkA > We're hearing semi-credible rumors that Genesis may be having solvency issues. They are having a call with their creditors tomorrow at 8 AM EST to explain the situation. If true, they may possibly be dissolving ETHE and GBTC to pay back their lenders. We will know more tomorrow.
Once the NAV eases, should it effect all their funds or just GBTC? Like... once the GBTC "discount" goes away, will ETHE's discount go away too or will that happen before/after? Same question for GDLC? I want to buy into GDLC, but I'm afraid if SEC rules in their favor, that it will only help GBTC and not their alt coin funds.
I’m done with crypto. I have lost almost every possible way. Down 78% in GBTC and ETHE in my 401k ($28k loss), lost about $1.5k on LUNA, dodged a bullet with Voyager getting all but $200 of my fiat out just in time and now $11k USD is stuck in Sending status on FTX.us. I just sold all remaining crypto I had on my ledger and Binance, and Robinhood and am awaiting Those ACH to clear. I’m done.
Oh I love this. Goodbye GBTC and ETHE. Bye Barry. BTC 5Y 218% GBTC 5Y +14% ETH 5 Y 388% ETHE 5 Y ~100% Bull run numbers from bear market bottom to last year's top- BTC 20.2X GBTC 14.8X It just never makes sense or does as well as the underlying.
Close that position and buy GBTC / ETHE, wait for discount gap to close then you get 1.5x [https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale\_gbtc\_ethe\_is\_now\_trading\_at\_35\_discount/](https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale_gbtc_ethe_is_now_trading_at_35_discount/) I'd say betting at discount gap close is better than shorting at the bottom.
I guess people now realize there's a positive correlation with the ETH price movement with the Grayscale ETHE fund, and other funds like GBTC too. For example on today small spike, ETHE discount gap close about 2%. [https://i.imgur.com/j22Y6p6.jpeg](https://i.imgur.com/j22Y6p6.jpeg) If you guys want to enjoy some extra bonus on top of your crypto, you still able to buy ETH or BTC via these funds at a 31\~33% discount: [https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale\_gbtc\_ethe\_is\_now\_trading\_at\_35\_discount/](https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale_gbtc_ethe_is_now_trading_at_35_discount/)
>What is happening to the discount gap right now? The discount gap is changing from time to time, you can take a look at below chart which shows the discount of ETHE market price against its NAV, as of this moment it's around 33% [Imgur](https://imgur.com/HiFDXP8) ​ >The underlying ETH is actually climbing in valuation rapidly and ETHE valuation is not. Please keep in mind ETHE are being traded only via OTC market and it follows the US stock market trading hours, so once the market close the price will show the last price of that moment, but when the market open it will follow up the movement. I have stated some of the reasons I believe why people are selling at a discount, and also say that I believe a huge part of it includes panic / fear selling. As for what are driving down the discount, I have heard some unverified sources that the share price is cause by large holders from 3 arrow capital, voyager, blockfi that dump their holdings to be able to fulfill withdrawals from their creditors. (They were taking massive amount of crypto from users with their staking program, then take it to Grayscale, have it converted to GBTC/ETHE or something alike, waiting for 6 months of locked in period and sell aftwards while there was a premium for doing so, there was even a time people paying up to 36X at ETHE against the NAV, but then it all crashed down when their holdings are still in lock-in period and the premium quickly diminished, then as they needed to pay their creditors, they had no choice but to liquidate large chunk of their holdings even with discount. Obviously this is not verified.)
You can get about 1.5x upside potential on top of BTC / ETH price movement with Grayscale trust fund GBTC / ETHE which is now trading at about \~33% discount to it's underlying lying assets. [https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale\_gbtc\_ethe\_is\_now\_trading\_at\_35\_discount/](https://www.reddit.com/r/CryptoCurrency/comments/ybe1wt/grayscale_gbtc_ethe_is_now_trading_at_35_discount/) I believe if you're going to use some sort of leverage, this might be even better choice, but of course it come with it own set of risk, and you need the discount gap to be smaller than when you bought to get those upside.
I agree, that seems quite logical and ethical and legal, but something odd is happening. The gap is closing. They appear to be selling of the underlying ETH that we provided liquidity for them to buy. At the same time, the valuation of ETH is going up, and we're not seeing the valuation of ETHE go up. If this continues the discount will disappear and who actually got the gain. If it continues we'll be at 1:1 or worse, and someone will have taken the gap/discount/difference while we're left holding bags. Make no mistake, I'm holding now, and this really has my attention. I'd welcome a liquidation at this point IF and ONLY IF we received the fair value. Can you explain why they are reducing their underlying ETH holdings and why we're seeing no appreciation of ETHE? No returns, nothing, just stagnation, even some drop in valuation. The correlation is out of whack and makes no sense to me.
What is happening to the discount gap right now? The underlying ETH is actually climbing in valuation rapidly and ETHE valuation is not. Simultaneously, I'm watching their holdings drop, yet I'm seeing no gains from their sell off of holdings, no dividends or returns or reward or whatever one might expect as they sell off the holdings that had such value. Who is getting the results of the sell off and why not ETHE holders ourselves? I'm looking for the valuation of ETHE to go up with the valuation of the underlying ETH, not for me to provide the fund the liquidity to buy more ETH then sell it, and I get nothing in return. What is causing this discrepancy? Who is gaining while I am... we are losing?
I'm not from the US but I look it up on self-directed IRA, I think even that there are still a few reasons I can think of for the average individual (not institutions) to buy these funds including: * There are costs with a self-directed IRA, which to some people the cost might not be cheaper than just buying GBTC/ETHE/etc * There are people who buy those funds because they simply don't want to deal with safekeeping, or maybe a mix of these reasons plus using their non-taxable account. That's why there is a period people even pay a premium on these funds
Thanks, for the nice write-up. There is a reasonable chance these funds become legit ETFs in the near future. Also, if GBTC or ETHE ever were to give owners a way to redeem for actual coins the value would instantly reset back in line. I bought my first GBTC back in 2015 in my IRA because it was an easy way to get crypto exposure. I would so much rather have an ETF.
That's fine though, but one could argue it's more simple to buy GBTC/ETHE via their brokerage account too than having to safekeeping their crypto. Not trying to argue but I'm just saying something that may be simple to you might not be simple to someone else.
Great, I actually think the best opportunity is to buy them with a non-taxable account, I actually passed on them because previously there wasn't such huge discount back when I have liquid funds, so I put them all into ETH validators. For me I don't care about the price on GBTC/ETHE, instead I look at the price of BTC/ETH to think if I am going to buy in more, and if yes, my next step is look at the discount of GBTC/ETHE, because the idea is I'm going to invest into those crypto anywhere, so where can I get the best deal
Futures ETF are those offered by CME, which as a synthetic financial product it doesn't actually hold the underlying asset, it tied the priced with the long pay short interest mechanism. However, GBTC / ETHE trust fund is actually a spot BTC/ETH fund that have actually underlying asset, the court case is Grayscale arguing there is a differential treatment and discrimination by SEC that approve the ETF of a futures of BTC while rejecting the spot BTC fund. The 2.0% fees isn't great, but it wasn't that bad to be honest, most business even willing to pay at a premium before the entire crypto winter, because the custody and compliance.
I initially bought GBTC (in 2017) when it was the only option for holding Bitcoin inside a ROTH IRA. Seemed like a great idea at the time but turned out to be a complete scam. And their ETHE trust is an even bigger scam. Not sure how what they’ve done isn’t completely illegal. For the record, I gradually sold all of my Greyscale holdings over the last couple years but it sickens me how much I lost through their “trust.” F*CK GREYSCALE!
Small positive adoption news. Recently, Stash added more crypto options to their personal brokerage option. Their automated brokerage already gave you a 5% exposure to GTBC and ETHE. But now, you can directly buy: BTC, BTC Cash, ETH, ETH Classic which are categorized as "Main Cryptos" along with "Alternative Cryptos" which are SOL, UNISWAP, Chainlink and Avalanche. I wonder what made them choose these ALTs over others like ADA, CRO, MATIC, DOT. Anyways, I might add Uniswap to my Portfolio there to mix a little crypto with stocks and further diversify my crypto holdings.
I am actually wrong. Acorns let's you invest into BITO. Stash lets you invest into GBTC and ETHE. Honestly, Acorns is decent. The Round-Ups make passive investing extremely easy. It also has a good mix of ETFs - the majority of my Acorns bag is VOO, for instance. You can also make up the $3 Monthly Subscription with a variety of easily claimed Acorns Earn Credit, so it's essentially free. The one downside I can think of right now is that you **have** to HODL for at least 5 years for it to be worth. It is not a short-term strategy. You also can choose your risk-tolerance, which slightly changes your portfolio (i.e. conservative risk-tolerance will include bonds). It's not exciting, but decent.
I agree with all your points. Personally, I have been investing in GBTC, and also ETHE (Ethereum Trust) since last year with a brokerage service called Stash. Full disclaimer, Stash is **not** the best service. However, they were early on this. Their robo-advisor allocates 5% to both GBTC and ETHE and so far I've been lucky to accumulate some positions in both during this bearish season.