Grayscale Launches Ethereum Covered Call ETF to Generate Income Amid ETH Rally
Grayscale, the world’s largest digital asset manager, has launched a new Ethereum-focused exchange-traded fund (ETF), debuting today under the ETCO ticker. The fund uses a covered call options strategy to produce regular income for shareholders 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 generated from these options are distributed bi-weekly, providing an income-oriented investment vehicle for investors seeking cash flow.
The ETF’s debut coincides with strong market performance for ether, which has outpaced bitcoin in 2025, rising 34% year-to-date compared with BTC’s 20%. The rally has been driven by a surge in both retail and institutional demand, evidenced by record inflows into spot ETH ETFs during August that exceeded those entering BTC funds.
“ETCO is designed to complement existing Ethereum holdings by adding a consistent income component,” said Krista Lynch, senior vice president of ETF capital markets at Grayscale.
Covered call strategies, commonly used in equities to monetize volatility and limit downside, are now being applied to crypto markets. By selling calls near the spot price, ETCO aims to convert ether’s price swings into a source of yield. The fund prioritizes generating current income, with a secondary objective of capturing returns linked to ETH.
ETCO joins Grayscale’s suite of income-focused crypto funds, which already includes the Bitcoin Covered Call ETF (BTCC) and the Premium Income ETF (BPI), offering investors new ways to combine crypto exposure with steady cash flow.
