Grayscale has launched the Ethereum Covered Call ETF, a product built to generate regular cash distributions instead of relying solely on ETH’s long-term price performance.
Rather than holding Ethereum directly, ETCO uses a strategy borrowed from traditional finance: selling call options. By writing these contracts near current market prices, the fund collects premiums that are then returned to investors. The payouts are scheduled every two weeks, giving participants a steady stream of dividends tied to Ethereum’s market swings.
Grayscale said this “income-first” approach is designed to appeal to investors who want consistent yield, while still maintaining exposure to ETH’s volatility. The collected option premiums can also soften the blow during downturns, reducing some of the asset’s natural turbulence.
ETCO sits alongside Grayscale’s existing Ethereum trusts, such as ETHE and the Mini Trust, but serves a different role. Krista Lynch, senior vice president of ETF capital markets at the firm, described it as a complement to ETH exposure, not a replacement. In her view, it gives investors another tool to tailor their portfolios depending on whether they prioritize growth, income, or both.
The ETF began trading on September 4 with more than $1.4 million in assets under management, 40,000 shares available, and a net asset value of $35.01 per share. While modest compared to Grayscale’s flagship products, the company sees ETCO as part of a broader expansion into tailored crypto investment vehicles.
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