It seems that an unknown crypto investor has paid a premium on Ethereum (ETH) when he tried to purchase shares of the Grayscale Ethereum Trust (ETHE). The investor that wanted to gain exposure to the market paid around $5,200 per ether when the digital asset is currently being traded close to $300.
Investor Pays $5,200 Per Ether
As the cryptocurrency market continues growing, there are several individuals and investors that do not want to lose the chance to invest in digital assets. Earlier this month, Grayscale Ethereum Trust launched an over-the-counter (OTC) market that allows retail investors to have access to ETHE. In this way, these interested investors have exposure to digital assets without holding them.
ETHE works in a similar way to Grayscale’s Bitcoin Investment Trust (GBTC). Users have to pay for a premium since there is a limited number of ETHE shares in the market. With it, investors have access to Ethereum without having to be worried about holding the virtual currency.
The firm reported a few days ago that they have $2.7 billion under management and each ETHE share had 0.0962 Ether backing it.
In general, most of the investors that are currently purchasing these shares and paying the premium prices that each share has are larger investors such as institutions that do not want to be worried about the security of their assets. In general, the premiums paid by users fluctuate according to supply and demand.
In addition to it, ETHE has an illiquid market, which makes it more difficult for investors to get a fair price for the virtual currencies they want to buy. Each of the shares has a net asset value of about $30, but the shares are currently being traded for $120. There was a moment in which each share had a price of $499, meaning that a user paid around $5,200 per token. This is much more than Ether’s all-time high reached in January 2018 when the market was experienced a massive bull run.
Any user would have been able to purchase Ether for less than $300 a few days ago in most of the cryptocurrency exchanges available in the market. However, there are still some issues that these platforms need to improve to welcome larger players and investors. Currently, each ETH can be purchased for $302 and it has a market capitalization of almost $32 billion.