Grayscale Investments, a manager of digital currency assets, has completed reverse share splits for its Bitcoin [BTC] Mini Trust ETF (BTC) and Ethereum [ETH] Mini Trust ETF.
The reverse share splits were implemented on November 20th, following the execution of the process the previous night.
In a recent blog post, David LaValle, Grayscale’s Global Head of ETFs, noted,
“In response to feedback from our clients, we have deemed this decision to be appropriate and advantageous for our clients and the investment community.”
Simply put, a reverse share split consolidates multiple shares into one, reducing the total number of shares and increasing the share price.
Effects of the reverse share split
The company highlighted the benefits of reverse share splits, stressing their ability to streamline trading and enhance cost efficiency for market participants.
In this recent move, the Grayscale Ethereum Mini Trust ETF underwent a 1:10 reverse share split, boosting the price per share to 10 times its pre-split net asset value (NAV) while decreasing the number of outstanding shares proportionally.
Similarly, the Grayscale Bitcoin Mini Trust ETF executed a 1:5 reverse split, increasing the price per share to five times its pre-split NAV with a corresponding reduction in outstanding shares.
Nonetheless, the asset manager pointed out that shareholders may end up with fractional shares post-split.
Depending on the policies of their Depository Trust Company (DTC) participant, these fractional shares may either be internally tracked or aggregated and sold, with shareholders receiving cash proceeds.
It is important to note that fractional shares cannot be traded on the NYSE Arca.
Performance of Grayscale’s Bitcoin and Ethereum ETFs
Following the split, Grayscale’s Bitcoin and Ethereum ETFs exhibited mixed performance, as per Yahoo Finance.
The Bitcoin Mini Trust ETF closed at $41.84, indicating a 1.80% increase during regular trading hours.
On the flip side, the Ethereum Mini Trust closed at $28.93, reflecting a decrease of 0.92%. However, it saw a pre-market surge to $29.58, registering a 2.25% gain.
Trading Commencement of BTC ETF Options
The reverse share splits pave the way for a significant development at Grayscale as the firm prepares to introduce Bitcoin ETF options for its Grayscale Bitcoin Trust (GBTC) Mini Trust on November 21st, marking a substantial expansion in the U.S. market.
The asset manager expressed its enthusiasm about this milestone in a recent post on X.
This step follows BlackRock’s IBIT options debut, which witnessed nearly $1.9 billion in trading volume on its first day in the market.