The Impact of Spot Ethereum ETF Applications on Grayscale’s Ethereum Trust
The growing interest in spot Ethereum exchange-traded funds (ETFs) has had a positive effect on Grayscale’s Ethereum Trust (ETHE). This has led to a significant increase in trading volume across various crypto exchanges, resulting in the ETHE discount narrowing to under 15%, its lowest level this year.
Grayscale’s Ethereum Trust Discount Decline
As of November 10, the discount on Grayscale’s Ethereum Trust has narrowed to 13.94%, according to data from Coinglass. This marks a substantial turnaround for an asset whose discount was previously as high as 60% earlier this year.
Nate Geraci, president of ETFStore, suggests that this contraction in the discount indicates the market’s anticipation of a spot Ethereum ETF. He compares the narrowing discount to a “live betting line,” indicating the possibility of ETF approval.
Rising Interest in Spot Ethereum Trading Volume
In recent months, the US Securities and Exchange Commission (SEC) has been reviewing applications for spot ETFs covering major cryptocurrencies, including Bitcoin and Ethereum. The regulator received several applications from leading traditional financial institutions such as BlackRock and Grayscale.
These applications have contributed to the current bullish sentiments in the crypto market, propelling Bitcoin to a yearly high of nearly $38,000 and Ethereum above $2,000. Notably, they have also substantially reduced discounts for Grayscale’s Bitcoin and Ethereum Trusts, which presently do not support redemptions.
Soaring Spot Ethereum Trading Volume
The ETF-driven rally has catapulted Ethereum trading volume over $6 billion, a milestone not seen since FTX collapsed last year. This surge follows a comparable increase in March when it briefly surpassed $6 billion, according to data from Kaiko.
The rising trading volumes also suggest that crypto investors are heavily trading Ethereum again after a lull for most of the year.
Hot Take: The Effect of ETF-Driven Rally on Crypto Assets
Recently, the crypto market witnessed a transformative journey with the recent ETF-inspired rally reversing the fortunes of several crypto assets, pushing them to new highs. Data from BeInCrypto shows that ETH is trading at $2,052 as of press time, up 12% during the past week.
The post Grayscale’s Ethereum Trust Discount Narrows Amid Rising ETH Trading Volume appeared first on BeInCrypto.
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