- Grayscale launched the Grayscale Ethereum Covered Call ETF (ETCO) on Thursday to offer ether exposure with an options-writing strategy.
- ETCO sells call options on ether-linked exchange-traded products and pays option premiums to shareholders on a bi-weekly basis.
- Ether has outperformed Bitcoin in 2025, rising about 34% year-to-date versus bitcoin’s roughly 20%.
- August saw large inflows into spot ETH ETFs that notably outpaced those into BTC funds, reflecting renewed retail and institutional interest.
- ETCO is an “income-first” product and joins Grayscale’s other income-focused funds, including BTCC and BPI.
On Thursday, Grayscale began trading the Grayscale Ethereum Covered Call ETF (ETCO), a fund that offers exposure to ether while using an options-writing approach to generate steady income. See the related image.
Ether has outperformed bitcoin in 2025, rising about 34% year-to-date compared with bitcoin’s roughly 20% gain, and August saw strong inflows into spot ETH ETFs that dwarfed those into BTC funds. “Grayscale Ethereum Covered Call ETF is designed to complement an investor’s existing Ethereum exposure by adding an income component,” said Krista Lynch, senior vice president of ETF capital markets at Grayscale.
ETCO systematically sells call options on Ethereum-linked exchange-traded products such as the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH). Selling call options means the fund grants buyers the right to purchase the underlying at a set price and collects premiums in return.
Those option premiums are distributed to shareholders on a bi-weekly basis, making ETCO an income-first strategy aimed at investors seeking cash flow. The fund’s primary goal is current income, with a secondary aim of capturing ether-linked returns by writing calls near the spot price.
Covered call strategies monetize volatility and can reduce downside risk; here, Grayscale applies that approach to crypto markets where ether’s price swings and liquidity create opportunities for option premiums. Wall Street firms’ use of blockchain to streamline trading and settlement has helped bring more capital into both spot and derivative markets.
ETCO joins Grayscale’s existing line of income-focused crypto funds, including the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI).
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