Ethereum blew through the $3,000 USD/ETH mark over the weekend and set another new all-time-high at 3,179 USD (via CoinMarketCap) and is not far from there now. Yesterday I was reading through the SquishChaos report on “Ethereum’s Triple Halving”, that I mentioned in the April Newsletter and I began to grasp the enthusiasm this must be generating within the space.
He has put a very fine point on the idea of funds flows, very similar to what we’ve been saying in the TCC Manifesto, but he’s really delved deeply into it, 79 pages worth. I’m going to have an entire section on it in the next newsletter (unless I write up a stand alone note for it, which is possible).
For now, Ethereum has blasted off and I found myself considering just adding to some of my Ethereum ETF positions to gain the most correlated exposure I could. But which ETF to buy? Looking at the choice (see the table below), one might be tempted to pick up either the new Purpose Ethereum ETF, or the slightly newer CI Galaxy Digital ETF, because the units cost a lot less than the 3iQ Ether Fund units.
But the important thing to look at across all of these options is the amount of ETH each unit in the fund holds, as we can see from the chart below, the 3iQ fund is actually trading at a sizeable discount to ETH M2M (Mark-to-market value of the unit’s ethereum). I don’t understand why this is, but it’s there. I’m using the straight, extrapolated ETH Mark-to-Market value in this comparison because that number differs from each funds’ stated NAV, most of them updated April 30.
For the Americans, there is the Grayscale Ethereum Trust, and for the three Canadian issues, I’m using the units that are priced in USD, this way we have a coherent comparison. The units are:
- The Purpose Ether ETF
- 3iQ’s Ether Fund
- CI Galaxy Ethereum ETF (US Series)
- The GrayScale Ethereum Trust (which is apparently closed to new investors but the units can still be traded online)
Canada just seems to be further down the road with actual crypto ETFs at the moment, but US citizens should be able to buy the US unit versions provided they’re using a platform that can access the Canadian markets. If you want to garner some more straight ahead Ethereum exposure (without owning the actual Ethereum directly) then I think any of these are good. The discount on the 3iQ perplexes me, but it’s there and who are we to argue with market inefficiencies…
There is also the matter of Ethereum Capital Corp (NEO:ETHC) which for the longest time was stubbornly being ignored by the market despite trading at a significant discount to NAV, it finally caught a bit today as well, up over 15% the last time I looked, but it too, is still trading at a significant discount to NAV, over 20%:
As for whether you should wait for the proverbial pullback before adding or acquiring exposure, only you can decide that. The momentum of Ethereum has certainly surprised me, and although we do have exposure in the portfolio via QETH and ETHC, we also have it via HIVE but the market seems to not notice, or care, at least today.
I’ll probably move some cash into one of the ETFs this week, especially on any dips or pullbacks below the psychologically significant $3K USD level.
