ETCG currently has a rather large premium. Right now ETCG is trading at $34.25 while ETC is valued at $7.50. In short, the trust is trading at over 4x its Native Asset Value.
Does this mean ETCG is a good sell and bad buy? Well, not necessarily.
The reality is crypto can be crazy and crypto products even crazier. For all we know this move is preceding a big run up in ETC. If ETC were to go from $7.50 to $25 over the weekend, which isn’t unheard of in crypto, then the trust would become closer to proper value and heck the price might even fly up.
Still though, in a perfect world we want to pay no premium, or at least a very small premium, and GBTC (the Bitcoin Trust) has a premium of less than 2x currently… so, let’s just say this is not ideal.
So, if you don’t know, now you know, and you might want to adjust your holdings accordingly.
If you did know, then you know your risk / reward ratio.
Fair value vs. current value aside, this “overbought” state of ETCG does hint that crypto is very bullish right now. Check out how I use GBTC and ETCG as indicators.
NOTE: I don’t tell people where to buy and sell on this site. However, I did suggest people keep a very close eye on ETCG when the premium was near zero a few months back, and now I am saying “hey, so like, premium as at a healthy 4x right now, might want to think about that.” I feel like with the right information, people can and should make their own choices. Good luck!