Grayscale Investments, a digital currency asset manager, recently implemented reverse share splits for its Bitcoin and Ethereum Mini Trust ETFs, with options trading for the BTC ETFs starting today. The changes took effect on November 20th, following the reverse share splits that were executed the previous evening. David LaValle, Grayscale’s Global Head of ETFs, expressed that the decision was made based on feedback from clients and is believed to be beneficial to the investment community. Reverse share splits combine several shares into one, reducing total shares while increasing the share price.
The firm noted the advantages of reverse share splits, emphasizing their ability to streamline trading and make it more cost-effective for market participants. The Grayscale Ethereum Mini Trust ETF underwent a 1:10 reverse share split, increasing the price per share to 10 times its pre-split net asset value (NAV) while reducing the number of shares outstanding proportionately. Similarly, the Grayscale Bitcoin Mini Trust ETF executed a 1:5 reverse split, raising the price per share to five times its pre-split NAV with a corresponding decrease in shares outstanding. However, shareholders may find themselves holding fractional shares post-split, which can either be tracked internally or aggregated and sold, with shareholders receiving cash proceeds.
Following the split, the firm’s ETFs for Bitcoin and Ethereum showed mixed performance, according to Yahoo Finance. The Bitcoin Mini Trust ETF closed at $41.84, marking a 1.80% increase during regular trading hours, while the Ethereum Mini Trust ended at $28.93, representing a depreciation of 0.92%. However, it saw a pre-market rise to $29.58, gaining 2.25%. The reverse share splits precede a major development for Grayscale as they are set to launch Bitcoin ETF options for their Grayscale Bitcoin Trust (GBTC) Mini Trust on November 21st, marking a significant expansion in the U.S. market. This move comes in the wake of BlackRock’s IBIT options debut, which saw nearly $1.9 billion in trading volume on its opening day.
