Grayscale, the world’s largest digital asset investment manager, has launched the Grayscale Ethereum Covered Call ETF (ETCO), which began trading Thursday. The fund offers direct exposure to ether while using an options-writing approach intended to generate steady income for shareholders.
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). Premiums from those options are distributed to investors on a bi-weekly basis, making ETCO an income-first vehicle that may appeal to cash-flow-focused investors.
The launch comes as ether has led gains in 2025, rising 34% year-to-date versus bitcoin’s 20%, supported by renewed retail and institutional interest and large inflows into spot ETH ETFs in August. Wall Street firms adopting blockchain technology for trading and settlement have also helped boost demand across spot and derivatives markets.
“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.
Covered-call strategies are common in equities: they monetize volatility and can reduce downside exposure while capping upside. Grayscale applies the same logic to ether, writing calls close to the spot price to turn price swings into yield. ETCO’s primary goal is current income; capturing ETH upside is a secondary objective.
Investors should note key risks: selling calls can limit upside when ether rallies, option markets can be illiquid at times, and income distributions are not guaranteed. ETCO joins Grayscale’s income-focused lineup alongside the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI).
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