500 Crypto Wallets Linked to Grayscale Ethereum Trust Discovered
Arkham Intelligence, an on-chain analytics platform, has found 500 crypto wallets associated with the Grayscale Ethereum Trust. The trust, which provides passive exposure to ETH, is the second largest entity by tokens held and has an AUM of $4.9 billion. The wallets were identified by analyzing activity and cross-referencing with Grayscale’s public balances. Each wallet holds a maximum of $30 million, and a total of 2.987 million ETH is spread across the 500 wallets. Other non-Ethereum ERC-20 tokens were also found in the wallets, including LINK, UNI, BAT, MKR, AAVE, SNX, and CRV.
Grayscale Ethereum Trust’s Discount to NAV
The Grayscale Ethereum Trust is currently trading at a 30.14% discount to its net asset value (NAV). The discount was even higher at 55% in June. The discount reflects the challenges in getting a spot ETF approved and the unstable conditions in the crypto sector. However, progress has been made since the beginning of the year, indicating increased investor confidence. The entry of BlackRock and other asset management funds into the sector and the applications for a spot ETF on bitcoin and ethereum have influenced the slight rise in the trust’s value in 2023.
Grayscale’s Future and the SEC Battle
Michael Sonnenshein’s fund could see a NAV premium of over 100% by the end of 2020. However, it faced negative discounts to NAV in early 2021 due to difficulties in becoming an ETF and regulatory pressures. The Grayscale Bitcoin Trust is also trading at a 20% discount to NAV. The SEC’s approval of applications from BlackRock, VanEck, Wisdom Tree, Invesco, and other hedge funds could result in a pump in the price of these funds, potentially returning them to a premium. Grayscale recently won a court battle against the SEC, but the outcome is still uncertain as the SEC can delay decisions and strategize to reject fund applications.
Hot Take
The discovery of 500 crypto wallets linked to the Grayscale Ethereum Trust highlights the extent of diversification and security measures taken by the fund. Despite trading at a discount to NAV, the trust’s value has shown some improvement throughout the year. The battle between Grayscale and the SEC for approval and regulation continues, and the outcome will have significant implications for the future of crypto funds.
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