As a key May deadline for spot Ethereum exchange-traded fund (ETF) applications in the U.S. draws closer, shares of Grayscale’s Ethereum Trust (ETHE) appear to have found firmer footing.As of Friday, shares in Grayscale’s ETHE traded at a 22% discount relative to the funds’ crypto holdings, according to data from Many crypto market analysts have expressed doubt that spot Ethereum ETFs will be approved in the U.S. in the short term. We will know soon enough, as the Securities and Exchange Commission (SEC) will be required to respond to its earliest applications for such a product from asset manager VanEck by May 25.Mark Connors, head of research at digital asset investment firm 3iQ, told Meanwhile, approval odds for spot Ethereum ETFs in May have declined from 76% in January to 6% on Monday, according to traders on the prediction platform Approval odds for spot Bitcoin ETFs were initially boosted last year by Grayscale’s By shorting Bitcoin while holding GBTC, investors were able to capitalize on GBTC’s waning discount, Conors explained. As to why ETHE’s discount has remained little changed over the past several weeks, Connors said some could be posturing for a repeat—even if that means “People have been rewarded for that,” Connors said, referencing institutions that traded GBTC through its eventual conversion to an ETF. “There’s a load of hedge funds that know this trade.”As Each share of ETHE Alongside VanEck’s bid to establish a new spot Ethereum ETF, Grayscale wants to convert its fund into one as well. They are among several firms waiting on the SEC for a response, including BlackRock, Fidelity, Hashdex, Invesco and Galaxy, and Ark Invest and 21Shares.Edited by Ryan Ozawa.
