The Grayscale Ethereum Trust (ETHE) is trading at nearly a 60% discount to the underlying value of its assets, with shares falling 93% from its Jun. 2019 all-time high (ATH).
There are many reasons behind the ongoing decline, but in recent weeks fears have grown that fallout from parent company Digital Currency Group’s debt of approximately $1.675 billion to troubled crypto lender Genesis could impact Grayscale assets.
YCharts data shows a 59.39% discount at the time of writing, a level the trust has traded at since at least Dec. 28.
Crypto Twitter influencer “db” tweeted an image on Jan. 4 depicting the entire collection of Grayscale crypto-based trusts with statistics showing their respective premium.
Every Grayscale trust and their respective premium % pic.twitter.com/TYQf5FmeXt
— db (@tier10k) January 3, 2023
It showed most of Grayscale’s trust funds are trading at a discount with Ethereum Classic Trust hit hardest, currently trading at a 77% discount, followed by Litecoin trust at 65% and Bitcoin Cash Trust 57%.
The Grayscale Bitcoin Trust (GBTC) is trading at a 45% discount.
Just two Grayscale Trusts are currently trading at a premium, the Filecoin Trust at 108% and the Chainlink Trust at 24%.
According to Grayscale’s official website there are currently $3.7 billion worth of assets under the Grayscale Ethereum Trust (ETHE) pool collected from 31 million shares.
The Ether (ETH) per share is around 0.0097 ETH, which is worth $11.77 USD, and the market price per share is $4.77 USD.
Grayscale’s parent company, DCG, came under fire again this week when Cameron Winklevoss, the co-founder of cryptocurrency exchange Gemini called out DCG CEO Barry Silbert in an open letter on Twitter.
Related: Will Grayscale be the next FTX?
Winkelvoss claimed DCG’s company Genesis owes Gemini $900 million in funds lent to it as part of Gemini’s Earn product that the two companies ran in partnership.
Digital assets research and analysis company Arcane Research suggested in a Jan. 3 report that the significant debt DCG and Genesis purportedly owe to Gemini could see DCG to initiate a Reg M distribution.
This would be bad for crypto markets but good for ETHE shares. According to Arcane: “A Reg M would cause a massive arbitrage strategy of selling crypto spot versus buying GrayscaleTrust shares. If this scenario plays out, crypto markets could face further downside.”
Winklevoss has been…