ETH Short Sellers Return as Ethereum Slides

ETH, the Grayscale Ethereum Staking Mini ETF, has had a rough week, and short sellers have noticed.

The most striking development in this fund's positioning is the speed of the short rebuild. Short interest jumped 424% week-on-week to reach 3.2% of free float, a move that looks aggressive in isolation but needs context: the prior week's base was exceptionally low, around 635,000 shares on October 23, meaning the current 2.4 million shares short is closer to where the fund was trading in late September. The one-month change is a far more modest 8%, which tells a calmer story. Borrowing costs remain cheap at 0.89% annually, up 14% on the week but still well within "easy borrow" territory. Availability is loose at 748%, meaning roughly seven and a half shares remain available to borrow for every one already on loan. That is tighter than mid-month, when availability ran above 7,000%, but nowhere near stressed.

Options positioning points in a different direction from the short build. Call demand is running well ahead of put demand, with the put/call ratio at 0.20, about one standard deviation below its 20-day average of 0.26 and close to the 52-week low of 0.16. Rather than hedging into the price drop, options traders have been adding calls. That gap between the short rebuild and the call-heavy options book is the clearest tension in this week's data.

The ORTEX short score of 38.8 reflects a modest pickup in short-side pressure but sits well below the levels that would flag a genuinely crowded short. The score has moved up from 28.4 on October 16 as the SI rose, but the trajectory is gradual rather than sharp. With the fund's price down 6.7% on the week and 17% over the past month to $21.29, the short rebuild may simply reflect traders hedging Ethereum price exposure through the most accessible liquid vehicle, rather than a directional bet against the fund itself.

The fund distributed a cash dividend of $0.0422 on October 5, reflecting the staking yield passed through to holders. That income component is the core product proposition of this vehicle, and it remains intact regardless of short-term price moves.

What to watch next is whether the divergence between the options market's call tilt and the short interest rebuild resolves, or whether one side capitulates as Ethereum price direction becomes clearer into the final weeks of the year.