Grayscale Launches Ethereum Covered Call ETF as Money Rushes Into ETH Funds

Grayscale, the world’s largest digital asset investment manager, has launched a new exchange-traded fund that ties into ether's (ETH) recent market ￰0￱ Grayscale Ethereum Covered Call ETF (ETCO) began trading Thursday, offering exposure to ether with an options-writing strategy designed to generate steady ￰1￱ launch comes as ether, the native token of the Ethereum blockchain, has outperformed bitcoin (BTC) in 2025, rising 34% year-to-date versus BTC's 20% Behind the gains is renewed retail and institutional interest, evidenced in August by surging inflows into the spot ETH ETFs that dwarfed those which headed into the BTC ￰2￱ Street firms have increasingly adopted the blockchain to streamline processes in their trading and settlement systems, creating a flow of capital into the asset that has lifted demand across both spot and derivative ￰3￱ aims to capture that interest while providing a buffer against ￰4￱ fund systematically sells call options on Ethereum-linked exchange-traded products such as the Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH).

The premiums generated from those options are distributed to shareholders on a bi-weekly basis, making ETCO an “income-first” strategy that may appeal to investors seeking cash flow. “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 ￰5￱ call strategies are common in equities, where they help investors monetize volatility while potentially reducing downside ￰6￱ is applying the same logic to crypto markets, where ether’s price swings and liquidity create opportunities for option ￰7￱ fund’s primary goal is generating current income, with a secondary aim of capturing ether-linked ￰8￱ writing call options close to the spot price, ETCO seeks to turn the token’s volatility — which often deters traditional investors — into a source of ￰9￱ product joins a growing line of income-focused crypto funds at Grayscale, which already includes the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI).