Research Note - Ethereum Capital Corporation (ETHC:NEO,$1.50|BUY $2.50 TARGET) - Discount To Nav Provides A Unique Opportunity
Crypto market turbulence is providing a unique buying opportunity for Ether Capital. With the recent crisis of confidence engulfing the entirety of the cryptoshpere, there have been and continue to be opportunities to profit.
Taking ETHC as a prime example, the common shares are currently trading at an ~26% discount to NAV (~24% discount to NAV if one assumes Wyre to be worthless).
ETHC’s core asset “Ethereum” is facing a crisis not due to any technological malfeasance but rather due to bad actors exogenous to the asset, or the tokenomics associated with the switch to a staking protocol via “the merge”. We still believe in the long-term potential of the Ethereum Blockchain, and continue to view this market turbulence as a great opportunity to enter the space or continue accumulating while the attention of many is on the headline stories.
ETHC holds their tokens in a cold storage and are not exposed to any exchange. The staked assets are staked directly with the Ethereum foundation. There is minimal risk that these staked tokens get lost to a hack or some other predatory activity.
ETHC provides a discount to “Ethereum”. The reader may believe in the future of cryptocurrencies as a whole; or may believe the system to be redundant. We suggest the reader who believes the former has a great opportunity to purchase Ethereum for a discount by acquiring ETHC.
We are maintaining our BUY rating and our target price at $2.50/share.