Ethereum News Today: Grayscale Unlocks Ethereum Volatility for Investor Income

Grayscale, a leading digital asset investment firm, has introduced the Grayscale Ethereum Covered Call ETF (ETCO) on NYSE Arca. The fund is designed to generate income through a strategy involving the sale of call options on Ethereum ETPs, such as Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH). These options are sold close to the spot price of Ether, leveraging its volatility to generate premium income that is distributed bi-weekly to investors. The fund's primary objective is to provide current income, while its secondary objective is to offer exposure to Ether returns [1].

ETCO began trading on Thursday, September 4, 2025, and is managed with a total expense ratio of 0.66%. The fund’s assets under management stood at approximately $1.4 million as of September 3, 2025, with a net asset value per share of $35.01. Its holdings include a significant allocation to a U.S. Treasury bill, as well as Ethereum ETPs and related options positions. The fund's portfolio is subject to change, reflecting its active management approach [1].

The launch of ETCO coincides with a period of strong performance for Ether, which has risen 34% year-to-date in 2025. This outperforms Bitcoin's 20% gain during the same period. The surge in Ether’s value is attributed to renewed retail and institutional interest, with inflows into spot ETH ETFs surpassing those into BTC funds in August. This trend has been supported by the increasing adoption of blockchain technology in Wall Street trading and settlement systems, driving capital inflows into both spot and derivative markets [2].

ETCO is positioned as an “income-first” strategy, aiming to appeal to investors seeking regular cash flow. Krista Lynch, senior vice president of ETF capital markets at Grayscale, emphasized that ETCO is designed to complement existing Ethereum exposure by adding a structured income component. Covered call strategies are well-established in equity markets, where they are used to monetize volatility while managing downside risk. Grayscale has adapted this approach to the crypto market, where Ethereum’s price movements and liquidity create opportunities for option premiums [2].

The new ETF is part of Grayscale’s expanding lineup of income-focused crypto products. It joins the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI), both of which seek to generate yield through options strategies. By applying traditional investment techniques to digital assets, Grayscale aims to provide a differentiated approach for investors seeking exposure to the digital economy. The firm has a long history of managing crypto assets, having established itself as a key player since 2013 [2].

ETCO is available for investment through brokerage accounts and is traded on NYSE Arca under the ticker ETCO. Investors can access the fund by searching for ETCO on their chosen platform or by visiting Grayscale’s website for additional resources, including the fund’s prospectus and fact sheet. The fund is actively managed, and its holdings and distribution strategies may evolve over time to meet market conditions and investment objectives [1].

Source:

[1] Grayscale Ethereum Covered Call ETF (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)