I finally sold all my ETH and bought Grayscale ETHE

Thought I should post an update to my bet on ETHE, if you do not know ETHE, it's a trust fund sponsored by Grayscale, and the fund is investing in spot ETH, and those ETH is under the custody of Coinbase.

What I'm betting on is the share price of ETHE would eventually align with it's underlying asset value, at the moment of writing one ETHE share owns about 0.00971630 ETH, and at current market price of $1900, that means the net asset value (NAV) of each share is $18.46, however at this moment the price of ETHE share is $8.91, that is actually more than 50% discount on NAV.

The main reason of such heavy discount are because currently there's no way to redeem ETH with your ETHE share, and previously some "high yield platform" that was actually doing arbitraging facing liquidity issues are forced to sell their GBTC/ETHE at discount to repay user's withdrawals.

This bet is also EXTREMELY RISKY, as there's a chance of this discount could be worsen, or stay for years while paying for 2.5% management fees.

In my previous post, I've been considering converting more of my ETH into ETHE, and in last 3 days I actually sold ALL of my ETH and bought ETHE. I was able to bring the average discount of my entire ETHE position from 40% to 50%, meaning from 1.67x to 2x potential profit if the discount close completely. This improved risk to reward ratio.

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my sheet of tracking ETHE versus buy and hold ETH and estimate performance on various discount levels

The reason I ended up selling all my ETH to ETHE are:

• At 52% discount now I think it's pretty much bombed out (Yes, there was a time it was close to 60% discount but I wasn't able to do it last time due to my ETH locked in validators)
• Even the discount gap just close 10%, to 40% discount to NAV, I would still be able to get 20% more than just buy and hold ETH. (The last section of my sheet is to estimate ETHE performance over B&H)
  • This can happen in various way, SEC losing the court case against Grayscale, regular people that are not tech savvy enough to buy crypto directly fomo into crypto via trust fund like these (which happened, originally gbtc/ethe are trading at crazy premium during bull market), shareholders of GBTC/ETHE suing Grayscale and won and forced a liquidation (meaning redeeming back the actual ETH market value)
• I'm always paranoid on safe keeping my own crypto, I have multiple ledger and trezor, but still I find myself always worrying about getting hack, exploit by some bugs or some malicious smart contract, etc etc. Then as I travel all the time I bring those hardware wallet with me, I have to worry about some people see my hardware wallet accidentally and pull a $5 wrench attack on me.
• Another reason is that I want my wife and family to be able to access my funds if anything happens to me, I thought about various way to do that, and I couldn't figure out a complete safe way, and even if I did, I still has to worry if they know how to retrieve my fund via seed phrase and not getting trick into exposing those seed phrase on phishing sites.

Honestly the last 2 reason are actually important to me, as soon as I sold all my ETH and bought ETHE, I feel a relief and less stress on my mental.

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no more checking my wallet everyday to make sure eth still there

Now I'm simply waiting for the next bull market regular folks fomo into these trust fund, as anytime the discount is less than 50% I would be winning over B&H on ETH, plus no more mental stress.