Quick take:
The share price of Grayscale’s Ethereum Trust (ETHE) has had a fruitful fourth quarter of 2020 by almost tripling in value since October 1st. At the latter date, the share price of the Grayscale Ethereum Trust (ETHE) was approximately $39. At the time of writing, the same ETHE is valued at $146 signifying a 274% increment in less than three months.
The chart below, courtesy of Tradingview, further demonstrates the impressive growth of the Grayscale Ethereum Trust’s share price.
The following can also be observed from the Grayscale Ethereum Trust (ETHE) chart above.
According to Grayscale, one share of their Ethereum trust is allocated 0.09276525 ETH. Doing the math, this corresponds to a value of $54 given Ethereum’s current price of $585. This means the Grayscale Ethereum Trust’s current share price is 2.7x more than the value of 0.09276525 ETH allocated per share and could very much be the first indicator of a possible correction for ETHE.
Conversely, it could indicate that the real Ethereum is very much undervalued and the ETHE premium rate is foreshadowing a rally for Ethereum (ETH) above its all-time high of $1,400. However, this is pure speculation and should not be considered investment advice.
Recently, Grayscale has been silently accumulating Ethereum. At the time of writing, assets under management in the Grayscale Ethereum Trust are at $1.73 Billon. This corresponds to approximately 2.94 million Ethereum (ETH) held by Grayscale. Chances are that Grayscale will continue purchasing Ethereum in a manner similar to how they have scooped up Bitcoin in the past one year.