Assets, Ethereum

How Does Grayscale Ethereum Classic Trust Work?

Grayscale Ethereum Classic Trust is an investment vehicle that provides exposure to the price movement of ETC, without the challenges of buying, storing, and safekeeping ETC.

The investment objective of the Trust is for the Shares to track the price of ETC, less the expenses of the Trust’s operations. The Trust’s expenses will be incurred by Grayscale and will include management fees, Bitcoin transaction fees and other general expenses.

The Sponsor is Grayscale Investments, LLC (“Grayscale”).

To provide exposure to ETC, the Trust will issue Baskets in exchange for deposits of ETH. Each Basket will consist of a specified number of Shares and each Share will represent a fractional undivided beneficial interest in the net assets of the Trust.

The number of Shares comprising a Basket will be based on the Exchange Rate on the date of deposit.

The Exchange Rate will be determined by reference to an index that measures the U.S.

dollar price of ETC relative to a basket of currencies (the “Index”). The Index is currently calculated by Bloomberg Index Services Ltd.

The Index price used to calculate the Exchange Rate will be rounded to four decimal places. When calculating the Exchange Rate, if the Index price is greater than $10,000 per ETH, then such price will be divided by 10,000 before being used to calculate the Exchange Rate. For example, if on a date one ETH is worth $13,000, then such price would be divided by 10,000 before being used in the calculation, resulting in an Exchange Rate of 1.30Shares per ETH (or 130% of an ETH).

NOTE: WARNING: Before investing in Grayscale Ethereum Classic Trust, it is important to understand how it works and the potential risks associated with investing in it. There is no guarantee of success when investing in Grayscale Ethereum Classic Trust and the value of your investment can go down as well as up. Investing in anything carries a degree of risk and you should always seek professional advice before making any financial decisions.

The reverse would occur if on a date one ETH was worth $9,900; in such case 9,900 would be divided by 10,000 before being used in calculation, resulting in an Exchange Rate of .99Shares per ETH (or 99%of an ETH).

The daily closing price of each Share will be equal to 95%of the daily volume-weighted average price (“VWAP”) of ETC as measured in U. dollars across all trading platforms that list ETC and are selected by OTC Markets Group Inc., provided that such platforms satisfy certain volume and other listing criteria as determined by OTC Markets Group Inc. in its sole discretion from time to time. In determining VWAP, all transactions occurring during a minute are aggregated and weighted according to their respective volume traded within that minute across all trading platforms utilized. This one-minuteVWAPis then multiplied by 360 (i.e., number of minutes in a day) to arrive at a daily VWAP figure for each trading platform utilized in calculating such day’s VWAP for ETC .

All platform transaction data utilized is provided by OTC Markets Group Inc. If there are no trades on a given day on any platform utilized in calculating VWAP for such day or if OTC Markets Group Inc., acting reasonably and in good faith believes that any trading platform included in calculating VWAP for a given day does not provide accurate transaction data for such day or does not meet listing standards as determined by OTC Markets Group Inc., acting reasonably and in good faith from time to time), then for purposes of calculating VWAP for such day only transactions from those platforms that did provide accurate transaction data and did meet such listing standards shall be utilized . DailyVWAPwill be rounded to four decimal places when calculated .

The Shares are not redeemable except under extraordinary circumstances described below or upon dissolution or liquidation of the Trust. Under certain circumstances described below relating to regulatory or operational issues involving Ethereum Classic or Grayscale Ethereum Classic Trust , shareholders may elect to receive redemption proceeds in either cash or shares of common stock of Digital Currency Group Inc., which currently owns Grayscale Investments .

However , there can be no assurance that Digital Currency Group Inc . will continue to own Grayscale Investments or that it will continue to offer shares of its common stock as a redemption alternative following any extraordinary redemptions .

The Sponsor believes that as institutional investors increasingly seek exposure to digital assets like ETC , products like GBTC help bridge the gap between traditional investments and digital assets . By offering GBTC , which trades on OTCQX® under ticker symbol ” ETHE ” , institutional investors can gain exposure to ETC through a traditional security without having to deal with some of complexities and challenges associated with buying , storing , transferring and safekeeping digital assets .

GBTC enables institutional investors , including hedge funds and family offices , as well as individuals , to gain exposure to cryptocurrencies like Bitcoin , Ethereum Classic , Litecoin , Zcash and Ripple’s XRP through a traditional investment vehicle . GBTC is one asset managed by Grayscale Investments LLC , which also manages Bitcoin Investment Trust (” BIT “)(OTCQX: GBTC) , Ethereum Classic Investment Trust (” ECT “)(OTCQX: ECTC) , Ethereum Investment Trust (” ETH “)(OTCQX: GBYTE) , Litecoin Investment Trust (” LIT “)(OTCQX: LTB) , XRP Investment Trust (” XRP “)(OTCQX: XLM)  and Zcash Investment Trust (” ZEC “)(OTCQX: ZCHN) .

Grayscale Investments LLC is headquartered in New York City.

6 Related Question Answers Found

What Does Grayscale Ethereum Do?

Since Ethereum is a decentralized platform that runs smart contracts, most people think of it as a digital currency. However, Ethereum has many other uses. One of these is Grayscale Ethereum Trust (GETH), an investment product that gives investors exposure to the price movement of ETH without having to actually purchase and hold the cryptocurrency.

Is Grayscale Ethereum Classic Trust a Good Investment?

As of late, Ethereum Classic (ETC) has been on the up and up. The price of ETC has more than doubled in the last month, and it doesn’t seem to be slowing down. This surge in price has led many investors to ask the question – is Grayscale Ethereum Classic Trust (GEC) a good investment?

What Is the Premium on Grayscale Ethereum Trust?

The premium on Grayscale Ethereum Trust (GETH) is an annual charge assessed by the Trustee to cover the costs of running the Trust. The premium is paid by investors who hold GETH shares, and it is assessed at a rate of 2% of the net asset value of the Trust. The premium is used to cover the cost of storage, insurance, and other expenses associated with running the Trust.

What Is Grayscale Ethereum Classic Trust?

Grayscale Ethereum Classic Trust is an investment product that enables investors to gain exposure to Ethereum Classic (ETC) in a manner that is similar to a traditional equity or fixed income investment. The trust holds Ethereum Classic and provides investors with a way to invest in the cryptocurrency without having to purchase, store, or manage it themselves. The trust is managed by Grayscale Investments, LLC, a digital currency asset manager.

What Is the Premium for Grayscale Ethereum Trust?

The Grayscale Ethereum Trust is a fund that invests in Ethereum. The trust is managed by Grayscale Investments, LLC. The fund’s objective is to track the performance of the price of Ethereum.

How Does Ethereum ETF Work?

An Ethereum exchange-traded fund (ETF) would track the price of ETH and trade on a stock exchange. The fund would be bought and sold like any other stock, and investors would have exposure to ETH without having to hold any cryptocurrency. The first step in creating an Ethereum ETF would be to get approval from the U.S.
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