The Grayscale Ethereum Trust, which offers its institutional and accredited investors to take advantage of private placements on several occasions throughout the year, has reopened the initiative of its shares.
- Grayscale announced resuming the Ethereum Trust private placement earlier, thus enabling accredited investors to allocate funds into the company’s product following the second-largest cryptocurrency.
- Private placement means a sale of an asset to a pre-selected number of investors and institutions rather than on the open market. It works as an alternative to an initial public offering (IPO) as it allows the company to raise capital for expansion. Grayscale opens such opportunities for its Trusts several times per year.
- It’s worth noting that while there’re few regulatory requirements for private placements, the Grayscale Ethereum Trust is actually an SEC-reporting product.
- CryptoPotato reported last year that the digital asset manager applied and was approved by the US Securities and Exchange Commission to submit financial statements as 10-Qs and 10-Ks, as well as quarterly and annual reports to the agency. Consequently, the ETH Trust is obliged to follow the same standards as all regulated US-based public companies and exchange-traded products.
- Following the approval, investors who own or purchase shares through private placements could benefit from enhanced liquidity as the statutory holding period decreased from 12 to 6 months.
- The Grayscale Ethereum Trust, described by the company as “the world’s largest Ethereum investment product,” solely and passively invests in ETH.
- As of writing these lines, Grayscale has over 285 million outstanding ETH shares with a price of a little above $0.01 per share. This means that the company stores more than 2.6 million ETH for its institutional clients –or about 2.3% of the circulating supply. To put this amount into a USD perspective, it’s just shy $3.6 billion.
- The Ethereum Trust is the company’s second most-successful product, after the Bitcoin Trust, which is responsible for a whopping 87% of the total AUM, according to the Q4 2020 report.