The premium of Grayscale Ethereum Trust is as high as 1000%, indicating that the market may completely warm up in the second half of the year?

Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc), Author: A Poplar, reproduced by Odaily with authorization.

Editor's Note: This article comes from

Vernacular Blockchain (ID: hellobtc)Gray scale investmentWith the gradual recovery of the Crypto market since "3.12", the recent performance of Ethereum, which is ushering in a critical moment, has become more and more eye-catching. At the same time, ETHE (Ethereum Trust), which is listed on the PINK market of the US stock market, is even more outstanding. In just 7 trading days, the price has more than doubled, and the increase in the past three months has also reached more than 600%. The highest soared to 1000%, far exceeding the performance of ETH spot in the same period.

The market has always been known as the "Bitcoin whale"

Gray scale investment

(Grayscale Investments), currently has two Crypto-type trust products with an AUM of over 100 million US dollars-Bitcoin Trust (GBTC) and Ethereum Trust (ETHE), which serve as trust funds for investors Providing compliant investment channels on Crypto has always been regarded as one of the main channels for the entry of large incremental funds in the market.

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The highly anticipated "naked multi-trust", almost crazy high premium for ETHE

According to the information on Grayscale’s official website, GBTC and ETHE cannot directly redeem their underlying assets at present, which means that they themselves are “naked multi-trusts” and can only enter and exit in the short term. Investors’ deposits have led to continued growth in the scale of trusts Under the circumstances, it is absolutely positive for the spot market-to buy the corresponding currency strongly from the supply side to buffer the selling pressure.

Taking GBTC Trust as an example, the deposit in the first quarter was about 400 million U.S. dollars. If it continues, 50% of the newly issued bitcoins will be absorbed by Grayscale every day after the halving (calculated at 10,000 U.S. dollars, and every quarter after the halving will be mined The newly mined Bitcoin is about 800 million US dollars). Not to mention that the quarterly deposit growth of GBTC is still very strong.

The full name of ETHE is Grayscale Ethereum Trust (Grayscale Ethereum Trust), which is the flagship trust for Ethereum ETH. As of June 8, the net value of ETHE reached 349.6 million US dollars, about 1.437 million ETH. From the perspective of the proportion of Ethereum circulation, it is already an out-and-out "Ethereum whale".

But what many people don't know is that one share of ETHE is not directly equal to one ETH. The official website data shows that each ETHE share "represents 0.09401903 ETH", that is, the current price of ETHE per share is about 200 US dollars, which only corresponds to about 20 US dollars of ETH spot - based on the latest official data on June 8, the market price of 22.86 US dollars The corresponding stock price of the Ethereum share in Grayscale Trust is $194.25, a premium of nearly 8 times.

After that, investors can freely list and buy ETHE shares in the form of stock trading in the PINK market (a quotation service that provides trading liquidity), realizing the holding and flow of Crypto assets that meet regulatory requirements.

That is to say, during the entire trust share generation process, Grayscale actually acts as an intermediate channel for qualified investors and institutions to intervene in the Crypto market, realizing the weak connection between investors and ETH spot, and opening up the direct exchange of incremental OTC funds. entry channel.

In the context of the delayed approval of the related Crypto ETF application, Grayscale’s move has established itself as almost the only compliant entry channel, which can be called a silent fortune. Therefore, for the currency trusts under Grayscale, the existence of a "compliance premium" has always been understood by the market. GBTC is generally maintained at around 20%-30%, and ETCG is relatively high, often around 2 times.

Even so, the premium has soared to 800% like ETHE, or even more than 10 times at one time, but it has never happened, which can be called abnormal. Where does such a high premium come from? How will it affect the spot market?

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Where does the high premium come from, and how to treat it rationally?

ETHE's continued unreasonable high premium may be able to find clues from Tesla not long ago.

At the beginning of this year, Tesla’s share price nearly doubled in 30 days, and then accelerated upwards, reaching a peak of 960 US dollars at one point. Many people ridiculed this strange trend performance out of the style of the circle, “Tesla Like Bitcoin at the end of 2017, it is in the final bubble carnival" remarks are endless.

In fact, whether it was Bitcoin at the end of 2017 or Tesla at the beginning of 2000, the short sellers contributed a lot to the extreme madness at the end-the last crazy sprint was fueled by the Air Force, "rational people Seeing that the price was seriously distorted, I went to sell securities to sell short, but the person who took over the order pushed up the price and exploded.”

Therefore, in this ETHE rising carnival that keeps pushing up the deformed premium, it may be the same drama. OTCMarkets data shows that the short interest in ETHE has been exhausted as early as May 15, and it is impossible to sell short.

Although ETHE cannot be used to redeem its underlying asset ETH, investors can participate in the private placement of ETHE Trust in the form of cash or ETH in the primary market, obtain equivalent shares according to the net value of the submitted assets, and then wait for 12 In one month, the ETHE shares in hand can be sold in the secondary market of the US stock market (GBTC is 6 months).

It is equivalent to using 1ETH to deposit more than 10 ETHE at the moment, and the ETHE share will be unlocked after 12 months. If the prices of ETHE and ETH remain unchanged, 10 ETHE replaced by 250 US dollars of ETH can be sold for about 2,000 US dollars.

That is to say, from a market perspective, the current high premium of ETHE is more like a 12-month "call option". However, this call option with huge arbitrage space may be just an asymmetric game - ETHE is open to institutional (main) and qualified investors in the primary market in the form of private placement, so that it can acquire in the secondary market shares sold.

In the secondary market, those who receive orders at such a high premium are most likely ordinary investors with unbalanced information.

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Can the 2020 moment of ETH and Crypto usher in a turning point?

2020 is undoubtedly a highly anticipated year for Ethereum and the entire Crypto market. Especially after the halving of Bitcoin, Ethereum 2.0 has become the key expectation to boost market confidence and generate hot spots.

And a series of Layer 2 expansion track attempts represented by Loopring's zkRollup solution do reflect the strong native self-evolution within Ethereum, and add a lot of optimism to the next stage of development of Ethereum. Zeng excitedly said: "Ethereum's two-layer expansion strategy has been 'basically' successful, and the rest is to improve and deploy."

With Ethereum making great strides towards the release of ETH2.0, DeFi is also developing gratifyingly. According to the statistics of DefiMaketCap, the total market value of tokens in the DeFi field reached 2 billion U.S. dollars on June 9, and the scale of various assets locked on the chain (in U.S. dollars) has gradually returned to the level before "3.12".

At the same time, the number of long-term holders of ETH has risen to the highest level ever, and the cumulative number of unique addresses has exceeded 100 million. These are the direct results of the market's optimism towards Ethereum 2.0 and the warming of the entire Crypto ecosystem. illustration.