Grayscale's Ethereum Trust (ETHE) has seen its discount narrow significantly, dropping to 16%. This marks a substantial change from its nearly 30% discount a month ago and close to 60% earlier this year.
Nate Geraci, an industry analyst, suggests that this trend could be interpreted as a gauge of market expectations regarding the approval of a spot ether ETF.
Currently, ETHE stands at an impressive $6 billion in assets under management (AUM), highlighting its prominence in the sector.
Grayscale's new conversion effort
As reported by U.Today, Grayscale, the leading crypto asset manager, has applied to the Securities and Exchange Commission (SEC) to convert its ETHE into a spot Ethereum ETF.
ETHE, launched in early 2019, has become the foremost Ether investment vehicle globally, accounting for 2.5% of the chief altcoin's total circulating supply.
This followed Grayscale's recent legal victory against the formidable regulator. A federal appeals court has ruled in their favor regarding their Bitcoin trust's ETF conversion application, thus adding momentum to their Ethereum efforts.
Converting the trust into a spot ETF would be a significant development for the company and the crypto market. ETFs are well-known and widely used investment vehicles that are familiar to both retail and institutional investors. This familiarity could attract a broader investor base to Ether. This would enhance liquidity and potentially stabilize the market. Additionally, ETFs generally offer lower fees and greater transparency compared to trusts, making them more appealing to cost-conscious investors.
BlackRock's Ethereum ETF plan
In parallel, BlackRock, the world's largest asset manager, has revealed its intention to bet big on Ethereum. Recently, the financial titan registered the iShares Ethereum Trust and partnered with Nasdaq, intending to list and trade shares of this trust.
Following this announcement, Ethereum's price experienced a surge, reaching a high of nearly $2,150.
BlackRock is also attempting to launch a spot Bitcoin ETF. Analysts believe that the SEC is very likely to greenlight such a product in the near future.
Larry Fink, CEO of BlackRock, has notably shifted from skepticism to becoming a vocal crypto proponent.