Major Caution Is Advised On Grayscale Ethereum Trust – Grayscale Ethereum Trust (OTCMKTS:ETHE)

With the cryptocurrency markets going wild again, there is major fear-of-missing-out taking place again as many speculators scramble to buy a position before the price rises further. However, buying cryptocurrencies through a normal exchange is a process that can easily take several days, as you may need to sell positions in your normal brokerage account, wait for the funds to settle, withdraw, wire the funds to your cryptocurrency exchange and only then buy a position – and in a crazy bull market, the price by that time may be drastically higher than when you originally wanted to get in.

That’s not to mention the huge fees that cryptocurrency exchanges usually have compared to ordinary stockbrokers, which are usually somewhere in the region of 1% or more of the total value of the position in a round-trip trade (vastly higher than a flat fee of only around $10 per 100 shares with brokers like Fidelity or Schwab, or only $1 per 100 shares with Interactive Brokers, for example).

With that in mind, it’s easy to see why Grayscale – a self-proclaimed “trusted authority on digital currency investing,” providing “secure access and diversified exposure to the digital currency asset class” is so appealing: they advertise stocks you can buy in your ordinary brokerage account that will roughly follow the price of Bitcoin (BTC-USD) (through GBTC), Ethereum Classic (ETC-USD) (through ETCG) and now Ethereum (ETH-USD) (through ETHE).

ETHE was only just launched, in fact, and will no doubt attract a plethora of buyers who want to get in on Ethereum’s action immediately. However, it’s important to know what you are buying, and in this article, I am strongly advising against holding any of Grayscale’s cryptocurrency stocks as a long-term investment. Regardless of how anxious you may be to get into Bitcoin or Ethereum, you should still buy it through a reputable exchange where you actually own the cryptocurrency yourself.

The first and biggest issue with ETHE (and…

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