Ethereum is now being offered at 50% discount via good old Grayscale crypto fund
The Grayscale cryptocurrency fund was one of the most popular ways to gain exposure to the cryptocurrency market, and it was widely used by institutional investors long before Bitcoin futures exchange-traded funds appeared. or even Ethereum, and today Grayscale’s Ethereum fund is offering a big discount on NAV. Here’s what that means.
Discount to NAV
The discount to the net asset value is a situation in which the fund’s price on the market is lower than its daily net asset value. The main reason cause of this situation is large selling pressure, which causes a strong drop in the value of a fund’s shares.
The opposite situation can occur when the fund is unable to adequately cover the existing demand for its shares. The rapid increase in the price of the shares of the fund puts the fund at a premium and makes investing in it disadvantageous.
Grayscale offers large discount
Because of the lack of demand and constantly occurring selling pressure, Grayscale’s Ethereum and Bitcoin funds are trading with a massive discount on NAV, which makes them potentially attractive for investors who have not yet received exposure to the market via spot assets.
Unfortunately, there are a few hurdles that keep some investors away from Grayscale funds, including a $50,000 minimum investment threshold for private investors and high fees.
While some traders and economists believe that receiving market exposure via Grayscale may help you maximize your profit whenever the next bullrun starts, others think that the fund will never again enter the premium zone because of the variety of alternative options for institutional investors, including futures and spot-based exchange-traded funds.
