There are premiums and then there’s Grayscale’s Ethereum Trust (ETHE) where 0.09427052 eth is currently going for $95.25.
In the open market that same amount is available for just $18.18, translating to the current price of nearly $200 per eth.
While ETHE is at a cool near $1,000 per coin, the highest premium ever seen for ethereum since it was invented in 2015.
There are in total some 13,255,400 of these shares as of April 24, 2020 with 5,230,200 of them outstanding as of December 31, 2019.
That means 8,025,200 shares have been bought, translating to 756,539 eth since December 31, 2019.
We can see above they were bought this year for as much as $143 for 1/10th of an eth, meaning here eth is at the spot all time high of $1,400.
What a nice fantasy land the Securities and Exchanges Commission (SEC) has given us because the only reason there is a complete detachment is the fact you can buy ETHE from your IRA or 401k portfolio, but you can’t buy eth through those.
These are pension portfolios. The IRA being the personal one while 401ks are by employees who contribute to your pension with the biggest perk being no capital gain taxes through these structures.
There are almost no other ways to buy eth through your pension or even stock and shares ISAs and likewise mechanisms save for ETHE and for Europeans the eth ETNs trading in Stockholm.
Americans can access those ETNs too, but there are protectionist regulatory measures that make it quite a bit more complicated.
So leading to this distorted demand for eth in part because supply is also distorted with this getting around the usual rules by requiring the share is held for a year before it can be sold off.
So what’s happening here with eth is what happened with bitcoin in 2016. Just as BTC back then, eth is now potentially coming out of a long and brutal bear market with some optimism it might reach ATH again and maybe even go beyond it.
Back then bitcoin too reached a premium of about as much as eth’s current one, with bitcoin’s moonshot in 2017 now lowering its premium to just 16% for now, while eth’s is 400%.
Crazy. Crazy SEC because so many have tried for so long to offer savers a proper investment vehicle through ETFs, but time and again SEC has just been saying njet and njet and njet.
Imagine in the current circumstances for example, when all assets are all over the place, if they could have been afforded the opportunity to hedge with eth or btc and so escape some of the oil ETF crash.
They can with grandpa gold, obviously, but these new assets get jumpy and excited like little children at even the thought they might go see a rocket launch, unlike grandpa who goes off to tell us about back when he saw the landing on the moon.
You get the point hopefully. Cryptos just are a different asset, and smart young millennials should not be denied the freedom and opportunity to have cryptos in their long term portfolios just because grandpas are stuck at a time when gold was the newest stock.
In addition it is very puzzling why European trading houses are not taking the opportunity to revive their stock markets by green-lighting a bitcoin, eth, or general crypto ETF.
Britain’s FCA has too said njet, parroting SEC with the same nonsense trash excuses that translate to something like: there’s too much potential gain in crypto for plebs to get their hands on it first and do so TAX FREE!
As we all know now, those early gains are reserved for billionaires who long passed a law restricting all from scooping up promising start-up equity through prohibiting such investment under the Securities Act 1933 – yup, a whole century ago – unless you’re rich of course.
For the rich there are almost no rules. Everyone else needs loicense, statsi papers, the begging of bureaucrats for months and years, and even then still have to put up with njet, njet, njet.
And they call it capitalism. Sure, when you have to go through the state for everything, it is definitely capitalism. Capitalism for the rich, communism for us plebs who should be grateful we can buy this through their loicense at a $800 premium, a whole monthly wage for many.