Digital Currency Group (DCG) subsidiary Grayscale Investments has introduced an Ether (ETH)-based security product called Grayscale Ethereum Trust (ETHE) that's now tradable through over-the-counter (OTC) markets. Grayscale’s blog post (published on June 20, 2019) also notes that ETHE is “an open-ended trust that holds Ethereum.”
“Open-Ended Trust” for Holding Ether
This means that investors looking to gain exposure to Ether need not hold the underlying cryptoasset itself. This, as Grayscale’s ETHE product is the “first U.S.-based publicly quoted security solely invested in and deriving value from the price” of Ethereum’s native token, ETH.
Gaining Exposure to Opportunities that Aren’t Correlated to Traditional Assets
Commenting on the launch of the investment manager’s latest product, Matt Beck, the Director of Investments and Research at Grayscale, remarked:
Cryptocurrencies — such as Ethereum — offer exposure to a unique set of market opportunities and risks that are uncorrelated to traditional assets. As a result, they can further diversify modern portfolios, enhancing returns per unit of risk (when positions are sized appropriately and maintained over long investment horizons).
In May 2019, Grayscale had reportedly obtained approval to list ETH in OTC markets from the Financial Industry Regulatory Authority (FINRA), a non-profit regulatory agency licensed by the US Congress.
Morgan Creek CEO Confirms Cryptoassets Not Correlated to Traditional Investments
Notably, Beck’s views regarding digital asset investments are similar to those expressed by Mark Yusko, the CEO at Morgan Creek Capital, who in May 2019 said that investors should now seriously consider adding Bitcoin (BTC) to their investment portfolio. This, as the experienced Wall Street investor believe bitcoin has a very low correlation with the performance of traditional assets - thus having (statistically) high diversification.
Grayscale Holding 203,000 Bitcoins
Grayscale’s total assets under management are presently valued at over $2.3 billion. This makes it one of the largest digital cryptoasset investment firms. In early December 2018, the management at Grayscale had revealed that it is holding over 203,000 BTC (appr. $2.25 billion at current prices) in its reserves.
A report from Longhash had confirmed (at that time) that Grayscale was the largest institutional holder of BTC - with the company controlling around 1% of bitcoin’s circulating supply of approximately 17.7 million.