Grayscale’s Ethereum Trust started trading last week. These are the premiums investors have paid above the net asset value of the Ethereum holdings…
June 20: 1,059%
June 21: 2,022%
June 24: 347%
June 25: 643%
June 26: 408%
Efficient Market Hypothesis be damned. pic.twitter.com/KMaJKB8ni6
— Charlie Bilello (@charliebilello) June 27, 2019
On June 24, Ethereum traded with a 2,022 percent premium at around $580 per share. Each share of ETHE represents 0.09624748 ETH, less than 10 percent of one Ethereum (ETH).
“Someone bought this last Friday at $580 betting that ethereum would rise, and they were right. Underlying ethereum rose from 27.33 to 30.34, an 11% gain. Only problem was they paid a 2,022% premium & today investors ‘only’ paid a 312% premium, resulting in a 78% loss thus far,” Bilello said.
As of June 28, Ethereum is valued at $305. The underlying assets of ETHE – 9.6 percent of one ether token – would be around $28.87. Instead, on June 24, investors purchased ETHE at $580, investing in the asset at a price of over $5,800.
Why are investors buying Ethereum with a high premium?
The premium-related issues in the crypto market are not specific to Ethereum. Investors in the U.S. market have been purchasing bitcoin with high premiums as well through the Bitcoin Investment Trust (GBTC).