Grayscale reverse share split lifts Bitcoin, Ethereum ETF prices
The reverse share splits are designed to streamline the trading of the ETFs.
Grayscale Investments, a leading issuer of cryptocurrency exchange-traded funds (ETFs), has finalized reverse share splits for its Bitcoin Mini Trust ETF and Ethereum Mini Trust ETF.
The move, completed on Nov. 19, is aimed at enhancing cost efficiency and aligning with investor preferences. The reverse share splits are designed to streamline the trading of the ETFs, increasing the price per share by a factor of five for Bitcoin and ten for Ethereum.
This adjustment also results in a proportional reduction in the total number of outstanding shares. “We are committed to evolving our product offerings based on feedback from the investment community,” Grayscale stated. “This change reflects our focus on delivering value and cost-effectiveness to our clients.”
Impact of Reverse Share Splits on BTC and ETH ETFs
The reverse share split for the Grayscale Bitcoin Mini Trust ETF resulted in a fivefold increase in the price per share following the adjustment, which took effect at 10 p.m. UTC on Nov. 19. While the number of shares held by investors decreased proportionally, fractional shares can still be tracked through the Depository Trust Company (DTC). Investors with fractional shares can opt for aggregation and sale, with proceeds distributed proportionally.
Grayscale emphasized that fractional shares are not tradable on the NYSE Arca exchange. For every five pre-split shares of the Bitcoin ETF, investors will now hold one post-split share at a value five times higher than the net asset value (NAV) of a pre-split share.
Similarly, the Grayscale Ethereum Mini Trust ETF underwent a 1:10 reverse share split, leading to a tenfold increase in the per-share price. Investors will hold one post-split share for every ten pre-split shares, with adjustments taking effect the next trading day, Nov. 20.
At the time of writing, the pre-market price for the Bitcoin ETF stands at $41, while the Ethereum ETF is priced at $2.90, according to TradingView data.
No Action Required from Shareholders
Grayscale has reassured investors that no action is required on their part, as the reverse share splits are automatically implemented. “Importantly, your holdings remain unchanged,” the company confirmed.
These adjustments underscore Grayscale’s ongoing efforts to optimize its crypto ETFs, providing greater cost efficiency and addressing the needs of its growing client base.
In May, BlackRock's IBIT fund achieved a major milestone in the cryptocurrency industry, surpassing Grayscale’s GBTC to become the largest institutional holder of Bitcoin. This marks a significant shift in the growing embrace of digital assets by traditional financial institutions.
