Cryptocurrency trusts have emerged as a convenient vehicle for investors who want to get exposure to leading digital assets. One such is the Grayscale Ethereum Trust (OTC: ETHE), which is a fund that is meant for investors interested in getting exposure to Ethereum.
However, on Thursday, the Grayscale ETF plunged by as much as 17.50% even though Ethereum experienced a decline of only 3%.
Experts believe that GET is substantially overvalued and that is possibly the main reason behind the steep decline. In order to get a better understanding, it needs to be pointed out that the share price is worth $6.24 of Ethereum each.
However, the ETF was being snapped up at $16 a share and that points to the fact that the share price is trading at a much higher level than the underlying asset. Hence, in case of possible overvaluation, it might not come as a complete shock if the ETF price continues to correct.