In brief

  • Grayscale operates an Ethereum Trust focused on institutional investors.
  • In 2020, it has been building up its Ethereum holdings at a faster rate.
  • It has purchased an amount of Ethereum equivalent to half of the new supply of coins in 2020.

Digital asset manager Grayscale has been buying one in every two newly mined Ethereum so far this year, on behalf of its investors. By April 24, it had purchased 48.4% of all coins mined since the start of 2020.

Grayscale has bought 756,539 ETH since the start of this year. The amount of ETH mined across the same period is 1,563,245 ETH, equating to roughly half.


Grayscale’s Ethereum Trust allows institutional investors to buy securities that track the value of Ethereum—at a 400% premium. It lets investors gain exposure to Ethereum without having to own any. To do this, Grayscale has to keep large amounts of Ethereum in its holdings.

Ethereum is the second largest cryptocurrency by market cap. Like Bitcoin, miners have to perform complex calculations in a proof-of-work race to mine new coins. However, the cryptocurrency is being switched over to a new proof-of-stake system, that will hand out new coins proportionally to those who already hold large amounts.

With the sudden influx of new Ethereum, Grayscale now holds 1.1% of its entire circulating supply. This isn’t such a problem with its current consensus algorithm but will be more of an issue when it changes to the proof-of-stake system.

Hypothetically speaking, if Grayscale were to acquire 50% of the circulating supply of Ethereum it could attack the network, being able to censor transactions and temporarily undo them. With just one percent, it’s still a long way off from getting close to that number—but its recent, rapid increase in purchases could accelerate it in that direction.

At just one percent, it is still a long way off from getting close to that number—but at the rate.


Grayscale is owned by Digital Currency Group, an investment vehicle that has ties with hundreds of projects across the crypto ecosystem. Famously, its founder Barry Silbert backed Ethereum Classic (ETC) during its controversial split with—what is now known as—Ethereum.

In 2018, Silbert stated the Digital Currency Group had 25% of its balance sheet in Ethereum Classic, with zero in Ethereum. He said that aside from the five coins it had invested in—including Bitcoin, Zcash, Decentraland and Zencash—all other cryptocurrencies are going to zero, including Ethereum.

Let’s hope that’s his guess, not Grayscale’s goal.

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