Grayscale Investments has been making headlines recently. Following impressive figures from its Bitcoin Trust and a bold campaign encouraging Americans to swap out gold for Bitcoin, the crypto powerhouse under Digital Currency Group has been granted permission to push forward in the Ethereum ( ETH ) investment ecosystem.
Introducing ETHE: The Ethereum Version of Bitcoin Trust
On Thursday, documents acquired by Blockonomi disclosed that Grayscale earned approval from FINRA, authorizing them to sell shares of their Ethereum Trust to the general public.
This new offering is geared towards enabling investors to engage with ETH price shifts through a standard investment channel without facing the usual obstacles of acquiring, storing, and safeguarding the asset. When trading begins in a few weeks, it will appear as “ETHE” on the OTCQX market. Michael Sonnenshein of Grayscale highlighted in a discussion with Bloomberg, “The secondary market essentially broadens accessibility for all types of investors.”
Interestingly, not all aspects may align perfectly with smaller-scale investors. Larry Cermak, The Block's research director, recently highlighted that Grayscale's offerings often cater more to larger institutional clients.
The analyst wrote For starters, only verified accredited investors can directly engage with GBTC, requiring a minimum stake of $50,000. Accredited investors are defined as those possessing personal wealth (excluding their main residence) over $1 million or individuals earning more than $200,000 annually. These criteria are a rarity among everyday investors.
There's clear documentation indicating that Grayscale's investment options are not designed with average individuals in mind. Back in May, Grayscale issued a statement revealing “Digital Asset Investment Report” for Q1 of 2019.
The disclosure noted that Grayscale drew in a total of $42.7 million over the opening quarter of this year. While this figure is substantial on its own, the key takeaway is that 73% of this amount stemmed from institutional investors, notably unmarked hedge funds.
It appears likely, therefore, that the majority of incoming funds will primarily continue to flow from large-scale players, despite the recent developments. Rather, this might be reflective of broader trends.
Nonetheless, this initiative shows Grayscale's intent to mimic the triumph of its Bitcoin Trust, which has become a staple product for institutional entities seeking BTC exposure. It's worth noting, however, that the Bitcoin Trust, known as GBTC in over-the-counter markets, frequently trades at a premium well above BTC's spot value, which could pose issues for investors.
Ethereum Gets Another Bona Fide
This aligns with Ethereum's current momentum. According to Blockonomi reported Earlier this month, a 'senior official' with insight into the U.S. Commodity Futures Trading Commission (CFTC) stated that they are quite open to embracing Ethereum. The individual asserted that 'we feel comfortable having an Ether derivative within our governing framework,' reinforcing ETH's status as a non-security alongside Bitcoin.
And for Ethereum, this isn't the lone positive update. Towards the end of April, whispers circulated about Samsung, a major tech conglomerate, and its intentions to establish a blockchain based on Ethereum to accommodate its unique token.
Adding to the buzz, Bosch, a prominent German engineering firm, announced its experimentation with an Ethereum-backed smart contract framework. A conversation with Decrypt revealed Bosch's efforts with blockchain use, although details remain sparse. This technology is rooted in enhancing the Internet of Things, evidently what Bosch aims to leverage.
