Ethereum News Today: Grayscale Turns Ethereum Volatility Into a Biweekly Paycheck for Investors

Grayscale, the world’s largest digital asset investment manager, has introduced the Grayscale Ethereum Covered Call ETF (ETCO), a new exchange-traded fund designed to generate income by leveraging Ethereum’s volatility. The ETF began trading on NYSE Arca on September 4, 2025, with a market price of $34.27 as of that date. The fund is structured to systematically sell call options on Ethereum-linked ETPs such as the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH), with the resulting premiums distributed to shareholders biweekly [3].

The launch of ETCO coincides with a strong performance by ether (ETH), which has surged 34% year-to-date in 2025, outpacing bitcoin’s 20% growth. This momentum has been fueled by increased retail and institutional interest, particularly in August, when inflows into ETH spot ETFs significantly exceeded those into BTC funds. The growing adoption of Ethereum-based blockchain solutions by Wall Street firms to streamline trading and settlement systems has also contributed to heightened demand for ether across spot and derivative markets [2].

Grayscale Ethereum Covered Call ETF operates under an actively managed strategy with a primary objective of generating current income and a secondary goal of participating in ether-linked returns. The fund's strategy involves writing call options close to the spot price, which allows it to monetize Ethereum’s price swings while potentially reducing downside risk. This approach aligns with traditional covered call strategies used in equities but is adapted to the crypto market’s volatility and liquidity. The fund incurs a total expense ratio of 0.66%, and it aims to provide a consistent income stream through its biweekly distribution schedule [1].

As of September 4, 2025, the fund had $1.36 million in assets under management, with holdings dominated by the Ethereum ETPs it targets. Specifically, 99.90% of the fund’s portfolio was allocated to ETHE and ETH, while a small portion was invested in the First American Government Obligations Fund and cash. The fund’s structure ensures that it is not individually redeemable and must be acquired or redeemed in creation units [1].

The Grayscale Ethereum Covered Call ETF represents the company’s expanding suite of income-focused crypto products. Alongside ETCO, Grayscale has already launched the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI), all of which aim to provide investors with diversified income opportunities in the digital asset space. Krista Lynch, senior vice president of ETF capital markets at Grayscale, emphasized that ETCO is intended to complement an investor’s existing exposure to Ethereum by enhancing it with a regular income component [2].

Ethereum’s continued innovation and adoption have made it a compelling asset for both income generation and capital appreciation. With ETCO, Grayscale is positioning itself at the forefront of this trend, offering investors a novel way to participate in the ether market while managing risk and generating consistent returns.

Source:

[1] Grayscale Ethereum Covered Call ETF (ETCO) (https://etfs.grayscale.com/etco)

[2] Ether (ETH) News: New Grayscale ETF Looks to Generate ... (https://www.coindesk.com/markets/2025/09/03/grayscale-launches-ethereum-covered-call-etf-as-ether-outpaces-bitcoin-with-34-gains)

[3] Grayscale Launches Ethereum Covered Call ETF as ... (https://www.xt.com/en/blog/post/grayscale-launches-ethereum-covered-call-etf-as-money-rushes-into-eth-funds)