Ethereum Covered Call ETF Launched by Grayscale as Investors Pour Into ETH Products

Grayscale Launches Ethereum Covered Call ETF to Deliver Income Amid ETH Rally

Grayscale, the world’s largest digital asset investment manager, has introduced a new Ethereum-focused ETF, debuting today under the ETCO ticker. The fund employs a covered call options strategy aimed at generating steady income while maintaining exposure to ether (ETH).

The Grayscale Ethereum Covered Call ETF (ETCO) systematically 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, offering investors an income-oriented approach in addition to ETH market participation.

Ether has outperformed bitcoin in 2025, rising 34% year-to-date versus BTC’s 20%, driven by both retail and institutional interest. August inflows into spot ETH ETFs notably exceeded those flowing into BTC funds, reflecting heightened demand.

“ETCO is designed to complement existing Ethereum exposure by adding a reliable income component,” said Krista Lynch, senior vice president of ETF capital markets at Grayscale.

Covered call strategies, widely used in equities to monetize volatility and reduce downside, are now being applied to crypto. By selling call options near the spot price, ETCO seeks to turn ether’s price swings into a source of yield, with the primary goal of generating current income and a secondary goal of capturing ETH-linked returns.

ETCO expands Grayscale’s suite of income-focused crypto funds, joining the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI), offering investors new avenues to combine crypto exposure with cash flow opportunities.