Grayscale Plans to Convert Ethereum Trust to Ether Spot ETF

Grayscale's Ethereum Trust currently invests in Ether futures contracts, while an ETF would invest directly in the cryptocurrency.

Grayscale Plans to Convert Ethereum Trust to Ether Spot ETF
Grayscale Plans to Convert Ethereum Trust to Ether Spot ETF

After the approval of the first Ether futures exchange-traded fund (ETF), Grayscale Investments intends to convert the Grayscale Ethereum Trust into an Ether spot ETF.

On October 2, the New York Stock Exchange Arca filed with the United States Securities and Exchange Commission (SEC) for the conversion.

The existing Grayscale trust invests in Ether futures contracts to gain indirect exposure to ETH, whereas a spot ETF invests directly in the underlying asset.

Michael Sonnenshein, CEO of Grayscale, declared the move on X (previously Twitter) and highlighted the company’s intention to offer conventional investment products with exposure to cryptocurrency assets:

“As we file to convert ETHE to an ETF, the natural next step in the product’s evolution, we recognize this as an important moment to bring Ethereum even further into the U.S. regulatory perimeter.”

The Grayscale Ethereum Trust was introduced in March 2019 and will become an SEC reporting company in October 2020, providing the public with direct access to information regarding the performance of its cryptocurrency investment vehicle.

At the time of writing, the Ethereum Trust is estimated to be worth $4.9 billion and accounts for approximately 2.5% of all circulating ETH.

In addition, Grayscale reports that 250,000 investor accounts are exposed to the trust. Grayscale also stated that it remains committed to converting its cryptocurrency products into ETFs at the conclusion of a “planned four-phase lifecycle.”

Currently, the platform offers seventeen distinct cryptocurrency investment products.