A flood of new shares in the Grayscale Ethereum Trust is sending its price in the opposite direction of the cryptocurrency that it holds.

The $3.5 billion fund, ticker ETHE, fell as much as 22% on Monday, despite Ether rallying almost 10%. The divergence was caused by a surge in the number of shares available to trade, with 116 million unleashed at the end of a lock-up period to join the 47 million that were already outstanding, according to Bloomberg Intelligence.

The divergence highlights the counterintuitive moves common recently in trusts that hold crypto assets, which can whipsaw traders unfamiliar with the mechanisms. Grayscale’s Ethereum trust is the exchange-traded product that invests in the second-largest cryptocurrency. The New York-based company’s Bitcoin trust, ticker GBTC, is the largest crypto exchanged-traded product, with a market value of about $22 billion.



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