Grayscale Introduces Ethereum Covered Call ETF as ETH Gains Momentum
Grayscale, the world’s largest digital asset investment manager, has launched a new Ethereum-focused ETF, trading today under the ETCO ticker. The fund uses a covered call strategy to generate consistent income while maintaining exposure to ether (ETH).
The Grayscale Ethereum Covered Call ETF (ETCO) writes call options on Ethereum-linked products, including the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH). Premiums earned from these options are distributed bi-weekly, providing an income-focused solution for investors seeking regular cash flow alongside ETH exposure.
Ether has outperformed bitcoin in 2025, rising 34% year-to-date versus BTC’s 20%. This growth has been fueled by strong retail and institutional demand, with August inflows into spot ETH ETFs exceeding those for BTC funds.
“ETCO is designed to complement existing Ethereum holdings by adding a steady income component,” said Krista Lynch, senior vice president of ETF capital markets at Grayscale.
Covered call strategies, common in equities to capitalize on volatility and mitigate downside risk, are now being applied to crypto. By selling call options near the spot price, ETCO aims to convert ether’s price fluctuations into a source of yield, focusing primarily on income generation while also capturing potential ETH gains.
ETCO joins Grayscale’s line of income-oriented crypto products, including the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI), giving investors new ways to combine crypto exposure with consistent cash flow.
